Zomato Q4 Results: Net loss narrows, revenues jumped 70%

Food delivery Zomato recently announced its results for the Jan - Mar ‘23 period. The company witnessed a massive jump in revenues along with a narrowing of losses. It highlighted the rising volumes across its food delivery and grocery businesses as key contributors to increase in revenues.

After facing some tough times, the Zomato share price has turned around its fortunes recently. In 2023 so far, the Zomato share price has gained close to 7% while over the past year it has risen close to 11%.

So, how did Zomato perform in the March quarter? What were the revenues clocked by Zomato? How much net loss did Zomato report? Was there any dividend declared by Zomato? We answer all these questions and more!

Decoding Zomato Q4 earnings

Zomato revenues:

• In the Jan - Mar ‘23 period, Zomato reported revenues of Rs 2,056 crores. This denotes a growth of nearly 70% from the previous year.
   
• Zomato’s food delivery business continued to draw the bulk of the revenues for the company even though its recent focus in the grocery delivery segment, Blinkit. The segment clocked revenues of Rs 1,172.5 crores for the March quarter, up 22.6% from the previous year.
   
• The Hyperpure business generated revenues of Rs 478 crores for the Jan - Mar ‘23 period. This denotes a yearly growth of 146.1%.
   
• The Quick Commerce Business which includes BlinkIt reported revenues of Rs 362.5 crores in the March quarter.

Zomato operating losses: Zomato’s operating losses for the March quarter narrowed to Rs 17.5 crores. This marked an improvement from the previous year’s figure of an operating loss of Rs 22.5 crores.

Zomato gross order value:

• In the March quarter, Zomato’s gross order value for the food delivery business came in at Rs 656.9 crores. This denotes a growth of 12.2% from the previous year. Notably, average monthly transacting customers for the same rose by 5.7% from the previous year to 16.6 million. Moreover, the contribution margin for the food delivery business improved to 5.8% from 1.7% in the previous year.
   
• Meanwhile for the quick commerce business, the gross order value for the Jan - Mar ‘23 period stood at Rs 204.6 crores, up 17% from the previous quarter. Also, the number of orders increased by 24.1% from the previous quarter to 39.2 million. Although the contribution margin remained negative at -2.7%, it improved from the Oct-Dec 22 period when it stood at -4.5%.

Zomato dividend: Zomato did not declare any dividend during the quarter.

Zomato net losses: Zomato reported net losses of Rs 187.6 crores for the Jan - Mar ‘23 period. This denoted an improvement and narrowing of losses from the previous year when it reported net losses of Rs 359.7 crores.

Zomato Q4 results: Analyst target price

Jefferies: The renowned global brokerage has a “Buy” rating on the stock with  a price target of Rs 100. Strong performance displayed by the Blinkit business, coupled with higher restaurant commissions and cost efficiencies have been highlighted by the firm as strengths that has the ability to drive the Zomato share price higher in the near term.

Kotak Institutional Equities: The top domestic brokerage has a “Buy” rating on the stock with a price target of Rs 82.

Citi: The leading global brokerage has a “Buy” rating on the stock with a price target of Rs 76. The firm believes that Zomato has the wherewithal to withstand the competitive pressure which in turn can lead to the share price growth.

Morgan Stanley: The renowned brokerage has a “Buy” rating on the stock with a price target of Rs 82. Tailwinds in its grocery delivery business has been cited as a key driver of Zomato share price growth in the near term.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.