Foodtech major Zomato reported its first net profit on Thursday propelled by a tax gain, a quarter ahead of its expectations.
To be sure, the chronically loss-making company, which listed on the stock exchanges about two years ago, is still losing money in its operations, with its expenses outweighing revenue.
“We expect our business to remain profitable going forward,” Akshant Goyal, the company’s chief financial officer said in its letter to shareholders. Zomato reported a profit of Rs 2 crore in the first quarter of the financial year 2024, compared to a loss of Rs 188 during the same period last year.
The financial milestone, albeit small, comes after years of losses incurred by the food delivery aggregator due to heavy spending as it chased growth.
Zomato’s revenue from operations grew by 71% on a year-to-year basis to Rs 2,416 crore during the quarter under review. The company further expects to increase its adjusted revenue by 40% over the next couple of years following a few quarters of slow growth.
The growth comes on the back of a rebound in demand since February, which helped grow the number of orders as well as average order value.
The firm also attributed the growth to growing adoption of its loyalty programme “Zomato Gold,” which pushed customers to order more frequently. The program now contributes about 30% to Zomato’s food delivery business.
While the company’s food delivery business has reported positive results, its business-to-business unit Hyperpure supplies and its quick-commerce unit Blinkit are still in the red.
Hyperpure, its farm-to-fork supplies offering for restaurants, incurred a loss of Rs 29 crore during the quarter, compared to a loss of Rs 44 crore a year before. The unit more than doubled its revenue to Rs 617 during the quarter.
Blinkit, which Zomato acquired last year, earned Rs 384 crore in revenue, marginally more than the last quarter, with a loss of Rs 105 crore. The loss has contracted from Rs 179 crore in the previous quarter. Zomato didn’t share last year’s financials for Blinkit.
