Zomato’s net loss for the quarter widens to Rs 430 crore
The stock is trending for its acquisitions and is up by 3% today.
Zomato is hitting the headlines again for two reasons: one for the quarterly results it has announced for the quarter ended September, and secondly for making significant investments in three companies. It posted both the announcements after market hours on 10 November 2021.
Talking about the financials, the company was able to achieve strong sales growth in Q2FY22. The sales increased to Rs 1,024 crore, up by about 21% when compared to the previous quarter. Even though there has been a great development in the top-line, the bottom has suffered a heavy blow. The net loss widened to Rs 430 crore as it stood at Rs 356 crore in the previous quarter. The company has been aggressively spending on branding and marketing for customer acquisition, and the contribution from smaller geographies (which are currently less profitable) is increasing, resulting in increasing net losses.
The company also announced the acquisition of a 16.1% stake in Samast Technologies Pvt Ltd (magicpin) through a cash consideration of Rs 371 crore against convertible preference shares. In the same fashion, it acquired a 7.89% stake in Bigfoot Retail Solutions Pvt Ltd (Shiprocket) for a cash consideration of Rs 57 crore. The board also has approved the acquisition of 6.4% of Curefit Healthcare Pvt Ltd (Curefit).
Zomato has been one of the buzzing stocks on Dalal Street ever since the filing of IPO news came out in the market. Zomato was already a popular online food delivery company before it became public. The recent trend of loss-making firms filing for IPO and getting higher valuations was initially set by Zomato. The company opened with a price of Rs 125.85 on the BSE on July 23, 2021. The stock created its all-time high of Rs 152.75 at the beginning of September and has displayed high volatility behaviour throughout. It is currently trading near the level of Rs 138.8. The stock has a 52-week low of Rs 114.
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