Zomato’s total income crosses Rs 5,000 Cr in Q2 FY25, posts Rs 176 Cr PAT

Foodtech and quick commerce leader Zomato has managed a 68.5% quarter on quarter growth in its operating revenue which surged to Rs 4,799 crore during Q2 FY25 as compared to Q2 FY24 (Rs 2,848 crore). This growth was largely driven by the expansion of Zomato’s core food delivery biz, its B2B Hyperpure vertical, and Blinkit.

The board at Zomato has passed a resolution to raise funds worth Rs 8,500 crore through qualified institutional investors. It has approved this decision, which coincides with its rival Swiggy’s public listing.

Let’s look at Zomato's revenue streams and their growth during the quarter ending September 2024 (Q2 FY25) one by one.

Food delivery business

Zomato’s food delivery business continues to be a major contributor, accounting for 42% of the total collection in Q2 FY25. Revenues from this vertical grew 30%, reaching Rs 2,012 crore, up from Rs 1,546 crore in Q2 FY24. The growth was steered by increased order volumes, higher average order values, and expansion into new cities.

Quick commerce (Blinkit)

The quick commerce segment, led by Blinkit, saw remarkable growth, with revenue jumping by 129% to Rs 1,156 crore in Q2 FY25 from Rs 504 crore in Q2 FY24. The segment's gross order value (GOV) growth was driven by an increase in order frequency and the addition of new stores, contributing significantly to the company’s overall revenue.

Hyperpure (B2B supplies)

Zomato's Hyperpure business, which focuses on providing supplies to restaurants, also delivered notable results, with revenue growing by 97% to Rs 1,473 crore in Q2 FY25, up from Rs 747 crore in Q2 FY24. The B2B segment continues to be a key growth driver for Zomato as more restaurants rely on its services for procurement needs.

Other revenue channels

In addition to these segments, Zomato generated non-operating income from its "going-out" services and other activities, contributing to its total revenue of Rs 4,799 crore in Q2 FY25.

Cost structure and profitability

Despite significant growth, Zomato faced increased expenses. Delivery and related charges rose by 97.9% to Rs 1,334 crore. This cost formed 29.2% of the overall expenditure. The company’s total expenditure climbed to Rs 4,783 crore in Q2 FY25, compared to Rs 3,039 crore in Q2 FY24. This increase was due to higher spending on procurement, employee benefits, marketing, and advertising. Employee benefits alone amounted to Rs 709 crore, a reduction of 11.2% from the previous quarter, driven by a decline in ESOP costs.

Zomato also made strides in profitability as it reported a 4.8X spike in net profit, with profits reaching Rs 176 crore in Q2 FY25, up from Rs 36 crore in Q2 FY24. The EBITDA before ESOP costs also showed improvement, with the figure standing at negative Rs 186 crore, reflecting an improvement of Rs 359 crore quarter-on-quarter.

Cash balance and market performance

Zomato ended the quarter with a cash balance of Rs 10,800 crore, demonstrating strong liquidity. Despite these financial improvements, Zomato’s stock witnessed a dip, trading at Rs 256.55 as of October 22, 2024, with a market capitalization of Rs 2,26,645 crore ($27 billion).

As Zomato’s arch-rival Swiggy prepares for its IPO, Zomato’s continued focus on scaling its operations, improving unit economics, and expanding its business segments augurs well for its future growth. With a solid foundation in place, the company is well-positioned to capture more market share in both the food delivery and quick commerce spaces.