Zomato Q1FY25 Results: Profits Soar Amidst Strong ESG Initiatives

Zomato Q1FY25 results has reported a robust performance. it is showcasing significant growth across all business segments. The company's year-on-year (YoY) topline growth remains steady at 62%, outperforming its outlook of 40%+. The bottom line continues to improve, with Adjusted EBITDA expanding to INR 299 crore from INR 194 crore in the previous quarter. Additionally, Zomato announced substantial growth in its quarterly profit on Thursday, driven by high demand for its food and grocery delivery services. During the April-June quarter, the company's consolidated net profit surged to Rs 253 crore ($30.22 million), marking a significant improvement from Rs 2 crore reported during the same period last year.

Zomato's Consolidated Performance

Gross Order Value (GOV) Growth: Zomato's B2C businesses (food delivery, quick commerce, and going out) saw a YoY GOV growth of 53%, reaching INR 15,455 crore.

• Food delivery GOV increased by 27% YoY.
• Quick commerce GOV surged by 130% YoY.
• Going-out GOV rose by 106% YoY.

B2B Business Performance: Hyperpure’s revenue grew by 96% YoY, with profitability improving.

Revenue and Profitability: Consolidated Adjusted Revenue increased by 62% YoY to INR 4,520 crore. Adjusted EBITDA saw a YoY increase of INR 287 crore, reaching INR 299 crore in Q1FY25.

Zomato's Segmental Performance

Food Delivery

• Growth: Food delivery GOV grew by 27% YoY.
• Market Outlook: With structural demand growth and robust supply dynamics, Zomato expects the industry to compound at a 30% CAGR over the next five years.
• Strategic Focus: The company remains focused on expanding its customer base, restaurant, and delivery partners.

Quick Commerce

Expansion: Quick commerce GOV grew by 130% YoY. The company aims to reach 1,000 stores by March 2025 and 2,000 stores by the end of 2026.

Category Expansion: The average selection available to customers has increased 4-5x over the last eight quarters, offering up to 25,000 unique SKUs in some locations.

Going-Out

Growth: The dining-out business operates at a run-rate of $500 million+ annualized GOV and is profitable.

Future Plans: Zomato plans to expand its going-out offerings, including movies, sports ticketing, live performances, shopping, and staycations through the new District (by Zomato) app.

Hyperpure

• Revenue Growth: Hyperpure’s revenue grew by 96% YoY with improving profitability.Environmental, Social, and Governance (ESG) Initiatives
• The Shelter Project: Expanded to 600 points across the country, providing shelters and rest points for delivery partners.
• First Responder Training Initiative: Achieved a Guinness World Record for the largest first aid lesson, training over 4,300 delivery partners in a single event.
• Sustainability: Reduced GHG emissions per kilometer by 9.4% compared to FY22, with a 4x YoY increase in orders delivered via EVs.

CEO Insights:

Food Delivery: “We remain on track to get to 4-5% Adjusted EBITDA margin (currently at 3.4% in Q1FY25). Once we achieve that goal, our mindset is to maintain margins at those levels, and invest any incremental gains into more aggressively improving the long-term health of the platform.”- Rakesh Ranjan, CEO, Food Delivery, Zomato

Quick Commerce: “Over the last six quarters, we have launched and scaled products in electronics, beauty and make-up, pet care, and children’s toys and we will continue to invest behind opportunities in newer categories as well.” - Albinder Dhindsa, Founder & CEO, Blinkit

“We have been focused from the beginning to increase the selection for our customers and offer it most efficiently to them. This has meant that the average selection available to customers in

any neighborhood has increased between 4-5x over the last eight quarters - we are now able to offer

up to 25k unique SKUs to our customers in some locations.”, he further added.

“The advent of quick commerce has made people want things faster than they would have otherwise

got from e-commerce. This has led to a direct share shift of some non-grocery use cases to

quick commerce where customers were primarily reliant on e-commerce for buying these products.

For instance, the demand we can generate for online first brands like Perfora in the oral care

space fits well with how customers consume the product and therefore their growth and adoption on

quick commerce is much faster than on e-commerce.” - Albinder Dhindsa, Founder & CEO, Blinkit

Going-Out: This dining-out business is now operating at a run-rate of $500m+ annualised GOV and is already profitable

“There is an opportunity to further expand our going-out offering, building on top of our dining-out

business. Additional use cases for customers in the going out space include - movies, sports

ticketing, live performances, shopping, staycations, etc. some of which we have already launched.

Building a one-stop destination app for going out could be a game changer for each of these use

cases, and we intend to do exactly that with our new District (by Zomato) app. If we execute this well, we see going-out becoming the 3rd large B2C business emerging out of Zomato.” - Deepinder Goyal, Founder & CEO, Zomato

He further added: “As per Zomato’s third party assured GHG emission footprint for the year FY24, emissions per kilometer have reduced by 9.4% compared to the base year of FY22 on the back of a 4x YoY increase in orders delivered via EVs, helping reduce the pace of increase in emissions, even as business grows”.

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