Zomato revealed its financial performance for the fourth quarter of FY24, which concluded on March 31, 2024. During this period, the company recorded a consolidated net profit of ₹175 crore, marking a significant improvement compared to the loss of ₹188 crore incurred in the corresponding period of the previous year.
On Monday’s trading session, the share price of the food delivery platform closed lower by nearly 2 percent at ₹196.65 per share. Over the past six months, Zomato’s stock has witnessed an increase of approximately 65.53 percent, and in the last year, it has surged by over 208 percent.
Additionally, the company revealed that its quick commerce platform, Blinkit, achieved profitability based on Adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) in March 2024. Moreover, Blinkit’s revenue experienced significant growth, more than doubling year-on-year to reach ₹769 crore.
Operating Performance of Zomato
Zomato reported a notable turnaround in its financial performance for the March quarter, with a net profit of ₹175 crore compared to a net loss of ₹188 crore in the same quarter of the previous year. Revenue from operations also saw a substantial increase to ₹3,562 crore, up from ₹2,056 crore in the corresponding quarter of the previous fiscal year. Furthermore, the company achieved an EBITDA of ₹86 crore, reflecting a significant improvement from the loss of ₹226 crore recorded during the same period last year.
Blinkit score profitable margin
In March, Zomato’s quick commerce arm, Blinkit, attained positive adjusted EBITDA. During the mentioned quarter, the revenue of the quick commerce sector soared to ₹769 crore, showing a notable rise from the ₹363 crore reported in Q4FY23, effectively doubling its previous figure. Throughout FY24, this division generated revenue of ₹2,301 crore, a significant increase from ₹806 crore in FY23, indicating substantial growth over the fiscal year.
Food delivery
Zomato’s food ordering and delivery segment in India experienced a significant revenue growth, reaching ₹1,739 crore in Q4 FY24, up from ₹1,172 crore in the same period of the previous year. Furthermore, for the entire fiscal year, revenue from this segment totaled ₹6,361 crore, demonstrating a substantial increase from ₹4,533 crore in FY23.
Employee Stock Option Plans (ESOP)
In a filing submitted to the BSE exchange on Monday, the food delivery company disclosed the allocation of employee stock option plans (ESOP), comprising 18.26 crore shares, to its employees across the company and its subsidiaries.
The company stated in its exchange filing, “A total of 18,26,27,402 grants fall under ESOP 2024, entitling 1 fully paid-up equity share with a face value of ₹1 each against each ESOP exercised (adjustments may occur due to corporate actions, if any).”
In a letter directed to shareholders, Zomato CEO Deepinder Goyal revealed the company’s intention to create an extra Employee Stock Ownership Plan (ESOP) pool, representing 2% of its current share capital on a fully diluted basis, subject to shareholder endorsement.
Goyal stated, “We will maintain our previous practice of ESOPs, with the strike price aligned with the face value; vesting will be contingent on time and performance criteria (specifics of which will be outlined in the postal ballot notice for shareholders’ approval). This fresh ESOP pool is anticipated to meet our requirements for at least the next five years.”
Expansion Plans
The company operates across 26 cities in India. During the fiscal year 2025, it expanded its footprint by inaugurating 75 new stores, bringing the total count to 526. Looking ahead, CEO Goyal mentioned that in the current quarter (Q1FY25), they anticipate adding another 100 stores, with the objective of reaching 1,000 stores by the end of FY25.
Additionally, Goyal highlighted that the expansion into cities beyond the top eight is primarily exploratory to gauge market potential. Thus far, most of the stores in these smaller cities have performed satisfactorily. The company plans to continue cautiously opening more stores in these smaller cities.
To conclude, Zomato’s financial results for Q4 FY24 showcased a remarkable turnaround, with a substantial net profit compared to the previous year’s loss. This positive performance was echoed across various segments, including its quick commerce arm, Blinkit, which achieved profitability and significant revenue growth. The company’s expansion plans, evidenced by the addition of new stores and the allocation of employee stock options, underscore its ambitious growth trajectory. With a strategic focus on expanding its presence in smaller cities while maintaining cautious optimism, Zomato seems poised for continued success as it navigates the evolving landscape of the food delivery and quick commerce industries in India.
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