Zomato CEO says 'bullish' on long-term growth, will add 7 million users each year

Zomato CEO Deepinder Goyal

Despite its shares getting hammered over the past few months, food aggregator Zomato is confident of long-term growth, with the company's founder and chief executive officer Deepinder Goyal saying on July 12 that it will add 7 million monthly users each year over the next decade.

"We are very bullish about the food delivery business over the long term. We will be able to add 7 million transacting users year over the next 10 years," Goyal said while speaking exclusively to CNBC TV18.

Goyal's claim comes amid speculations over Zomato's growth curve plateauing, with COVID-19 fears fading away from restaurant customers and most of the pandemic-related restrictions being lifted.

Zomato had, notably, witnessed a sharp spurt in orders during 2020 and 2021, when the coronavirus-induced lockdowns had led to the closure of in-dining facilities at restaurants and other eateries.

Also Read | Zomato board approves deal to acquire Blinkit for Rs 4,447 crore

In the backdrop of this growth, Zomato went public in July 2021 and witnessed a solid listing with a market cap of Rs 1 lakh crore. Over the past few months, however, the company has faced a tough time on Dalal Street. The company has been hit by the rout faced by tech-driven platforms and has lost over 60 percent value in 2022 so far.

"What it (tech rout) has forced us to do is think harder about how to grow and become profitable at the same time. Earlier, it was just growth at the compromise of profitability. Now, we are trying to do the 'and'," Goyal said, on a day when the company's shares were trading at Rs 56.1 a piece, which is 67 percent lower compared to the all-time high of Rs 169 recorded on November 16, 2021.

Commenting on its recent BlinkIt acquisition, Goyal said, “Profitability has to happen and we also need to protect our long-term view of how this business will look 10-20 years from now. So, Zomato is racing for profitability and BlinIt is becoming efficient every day.”

Goyal did not disclose any timeline as to when the company could be profitable.

Goyal said that Zomato will take a call on what needs to be done with the cash on books over the next year. The company is "not looking at any acquisitions right now", he noted, while clarifying that it is neither looking at layoffs nor a hiring freeze.

Commenting on the rising inflation, Goyal said, “Inflation could be a minor blip for 3-6 months, but over the longer term we are very bullish about the business.”

Zomato, which pulled the shutters down on the last of its international businesses in November 2021, is unlikely to venture further into the global market, as per Goyal. "International business does not fit into our roadmap anymore," he said.

The company reported a net loss of Rs 359 crore in the fourth quarter of fiscal year 2021-22. Its revenue during the same period climbed to Rs 1,211.8 crore. Further, it reported an EBITDA loss of Rs 449.7 crore in Q4 FY22, as compared to a loss of Rs 153.5 crore in the corresponding period last year.