Zomato Q4 net loss triples on higher expenses, revenue jumps 75%

Food delivery company Zomato reported strong growth in revenue but an even faster rise in expenses that pulled it deeper into the red for the fiscal fourth quarter ended March 31.

Zomato reported a net loss of Rs 360 crore, as against a loss of Rs 134 crore in the quarter ended March 31, 2021.

Losses jumped on a sequential basis, too, from Rs 67 crore in the three months ended December 31, 2021.

Consolidated revenue from operations surged 75% to Rs 1,212 crore from Rs 692 crore a year earlier. Sequentially, however, revenue rose just 9%.

Total expenses during the fourth quarter rose to Rs 1,702 crore from Rs 885 crore earlier, Zomato said.

On Monday, the company’s shares on the BSE closed 1.8% lower at Rs 57. Zomato’s share price, which made a strong debut on the bourses last year, has corrected sharply and is now down 66% from its peak of Rs 169.10. The company had issued its shares at Rs 76 each during the IPO.

Other Key Highlights

1) For FY22, consolidated net loss increased to Rs 1,222.5 crore from Rs 816.4 crore in the previous year.

2) Revenue from operations in FY22 more than doubled to Rs 4,192.4 crore from Rs 1,993.8 crore in FY21.

3) Average monthly transacting customers at all-time high of 15.7 million in Q4, up from 15.3 million in Q3.

4) Gross Order Value grew 6% QoQ and 77% YoY to a record high of Rs 5,850 crore in Q4.

5) Launched operations in 300 new cities in Q4. Now present in 1,000 towns and cities across India.

6) Adjusted revenue grew 8% quarter-over-quarter and 67% year-over-year to Rs 1,540 crore in Q4.

7) Adjusted EBITDA loss reduced to Rs 220 crore billion in Q4 from Rs 270 crore a year earlier.

Management Commentary

Zomato Founder and CEO Deepinder Goyal said the company is aiming for accelerated growth along with further reduction in losses and increasing profits in some time.

“We are clear on what our long-term shareholders expect of us and we are working hard to deliver on both growth and profitability expectations,” Goyal said.

He also said growth trajectory is back on track, and the management doesn’t foresee ‘post-COVID ramifications’ affecting the growth rate. “Having said that, even before COVID, growth in our business has been lumpy (and not linear) – so it is essential to take a long-term view of our business,” he said.

On reports of Zomato acquiring quick commerce company Blinkit (formerly Grofers), he said, “We have committed to give them a short-term loan of up to $150 million to fund their short-term capital needs. Beyond that, there is nothing to share at this moment.”

He, however, said Zomato remains bullish on quick commerce, especially given how synergistic it is to its core food delivery business. Blinkit has grown well in the past six months and has significantly reduced its operating losses, Goyal said. “While there is a lot to do as the business is at its early stages, there's still a lot of low hanging fruit to drive growth and efficiency,” he said.