Zomato Q3 Results: Loss Widens, Food Delivery Business Nears Operational Break-Even
Zomato posted a net loss of Rs 346.6 crore in the December quarter.
Zomato Ltd.'s losses widened sequentially as the company's quick commerce acquisition, Blinkit, continued to bleed, while the core offering of food delivery neared adjusted Ebitda profitability.
The Gurugram-based restaurant aggregator posted a net loss of Rs 346.6 crore in the October-December quarter, against a loss of Rs 250.8 crore in the previous quarter. That compares to the Rs 321.21 crore estimated by a consensus of analysts tracked by Bloomberg.
Key Highlights (Consolidated, QoQ)
Revenue rises 17.2% to Rs 1,948.2 crore versus Rs 1,661.3 crore, compared to an estimate of Rs 1,785.8 crore.
Ebitda loss at Rs 366.2 crore versus Rs 418 crore, as against a forecast of Rs 352.95 crore.
In its earnings release, the company said it turned adjusted Ebitda positive (Hyperpure, Feeding India, Zomato, excluding Blinkit) in January 2023.
"We have seen an industry-wide slowdown in the food delivery business since late October (post Diwali). This trend has been seen across the country but more so in the top eight cities," Zomato said.
The firm attributed it to a "macro slowdown for the mid-market segment, boom in dining out for the premium-end, and boom in travel at the premium-end".
It said there is a good chance of the company to reach adjusted Ebitda break-even—excluding quick commerce—in the current quarter if it is "able to bank some execution related wins in the next few weeks (which should offset the negative impact of Zomato Gold on our margins)".
Shares of the company ended 0.3% higher at Rs 54.4 apiece, compared to a similar rise in the Sensex. Still, the stock is trading 28% below its IPO price.
Of the 25 analysts tracking the company, 18 maintain 'buy', four suggest 'hold', and three recommend 'sell', according to Bloomberg data. The 12-month consensus price target implies an upside of 46.1%.