Zomato Q4 Results: Net loss almost triples to Rs 360 crore; revenue spikes 75%
Losses widen: Zomato, online food delivery, reported a net loss of Rs 359.7 crore for the March quarter as against a net loss of Rs 134.2 crore for the year-ago period. The losses widened nearly three times. The loss for the December quarter was Rs 63 crore. The losses increased because of a surge in expenses which climbed from Rs 885 crore in Q4FY21 to Rs 1,701 crore in Q4FY22.
Revenue rise: Revenue from operation increased to Rs 1211.8 crore in Q4FY22, a growth of 75% from Rs 692.2 crore in Q4FY21. Sequentially, adjusted revenue increased by 8%. The revenue increased for the March quarter due to increased demand for restaurant meals.
EBITDA: Earnings before interest, tax, depreciation, and amortization loss came at (Rs 449.7 crore) in the March quarter compared to a loss of (Rs 153 crore) in the corresponding quarter last year.
Gross Order Value: Company's Gross Order Value (GOV) increased by 77% YoY and 6% QoQ and stood at Rs 5,850 crore for the Jan-Mar quarter. This was driven by healthy growth in order volumes while the average order value remained stable. On the profitability front, Contribution as a % of GOV increased to 1.7% in Q4FY22 as compared to 1.1% in Q3FY22.
Other important numbers: The average monthly transacting customers rose to an all-time high of 15.7 million last quarter growing from 15.3 million in the third quarter. The company added its presence in more than 300 cities in the fourth quarter. It now operates in 1000+ towns and cities in India. New customer addition remains healthy and similar to Q3 numbers despite reduced marketing spends (-14% QoQ).
Management Commentary: "Our adjusted revenue growth to accelerate to double digits in the next quarter and the adjusted EBITDA losses to also come down meaningfully. Reduction in losses will be driven by improvement in a contribution margin of the food delivery business and also operating leverage playing out as our revenue is growing faster than our fixed costs,” the company said in its press release.
Latest brokerage update
JPMorgan: The brokerage firm said adjusted Ebitda losses continued to decline for Zomato and that gross order value (GOV) saw strong growth as orders came back. It added that the food delivery revenues rebounded for Zomato in the March quarter. It suggested a price target of Rs 130 on the stock.
Citi: The firm has a target of Rs 80 on the stock as it revised its estimates to incorporate FY22 numbers. It also talked about a 6% sequential growth in GOVs and a fall in adjusted Ebitda losses to Rs 220 crore.