Zomato saw the gross order value of its food delivery business shrink about 1 percent to Rs 6,569 crore in the March quarter due to an industry-wide slowdown and its exit from 225 cities in the previous quarter.
Average monthly transacting users also fell from 17.4 million to 16.6 million, sequentially, the food aggregator said in its March quarter earnings released on May 19.
"The quarterly growth is low because of the demand slowdown we witnessed in our business from late October last year till the end of January this year.
"As we had mentioned in our last letter, we had started seeing green shoots of recovery in the first week of February 2023. That recovery has continued and the business has grown well since then and the same should reflect in better GOV growth in the next quarter. We are expecting QoQ GOV growth to be in high single digits in Q1FY24," the company said in its shareholder letter.
"This could have been higher if not for the industry-wide slowdown that continues to weigh on growth. There were two other factors that impacted growth in the quarter - (a) February being a shorter month (-2.2% impact) and (b) shutdown of ~225 cities in January 2023 - as reported in our last shareholders’ letter (-0.3% impact). Normalised for these factors, we would have seen a QoQ GOV growth of 0.8% in Q4FY23 instead of a decline of 1.7%," it added.
Revenue from operations came in at Rs 2,056 crore, rising 69.66 percent from Rs 1,211.8 crore in the corresponding quarter year ago, Zomato said in a regulatory filing.
The company said its business, excluding quick commerce, turned adjusted EBITDA positive in the March quarter, driven by the food delivery business generating Rs 78 crore of EBITDA. Zomato added that it plans to get positive adjusted EBITDA and PAT on a consolidated basis including quick commerce in the next four quarters.
Deepinder Goyal, co-founder of Zomato, said the company will get to the goal by increasing profits in the food delivery business and reducing losses in the quick commerce (Blinkit) business.
“Over the last five quarters, we have improved our margins meaningfully while further strengthening our market position. We will continue with the same mindset as we look to further expand the Adjusted EBITDA margin (from the current 1.2 percent) to our stated goal of +4-5 percent of GOV (which would translate to Rs 1,000 to 1,300 crore of annual cash operating profit at the current scale of the food delivery business),” he said in a letter to shareholders.
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