INDIA – India’s largest food delivery, dining and restaurant discovery service Zomato has expressed confidence in its growth trajectory despite its fourth-quarter losses becoming three times larger than they were last year.
According to recently released financial statements, consolidated net loss for the quarter ended March widened to Rs 360 crore (US$46 million), three times more than the Rs 134.2 crore (US$17 million) incurred in the same time last year.
A silver lining for the Gurugram headquartered company was its revenue from operations which jumped 75.01 % to Rs 1,211.8 crore (US$156 million) from Rs 692.4 crore (US$89 million) in the same quarter last year.
Deepinder Goyal, Zomato’s co-founder and chief executive officer, said the firm had a low QoQ (quarter-on-quarter) growth in Q3FY22 as dining-out and travel opened up post-Covid.
“We believe that was a one-time correction of our growth trajectory on the back of two strong quarters,” said Deepinder Goyal in a company blog post.
“We think our growth trajectory is back on track, and we don’t foresee ‘post-Covid ramifications’ affecting our growth rate anymore.”
Goyal was quick to add that even before Covid, growth in Zomato’s business has been lumpy (and not linear) making it essential for the business to take a long term view.
During the quarter, the company said it launched services in more than 300 new cities, taking its footprint to over 1,000 towns and cities across India.
Akshant Goyal, Zomato’s chief financial officer, said the firm expects its 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 contribution margin of the food delivery business and also operating leverage playing out as our revenue is growing faster than our fixed costs,” said Akshant Goyal.
Average monthly transacting customers were at an all-time high of 15.7 million last quarter growing from 15.3 million in the previous quarter.
Likewise, average monthly active restaurant partners and delivery partners were at all-time highs as well.
For the fiscal year 2022, losses of the company came in at Rs 1222.5 crore (US$157 million), compared to Rs 816.4 (US$105 million) in the previous year while revenue increased to Rs 4192.4 crore (US$549 million) from Rs 1993.8 crore (US$256 million).
Moving forward, Zomato expressed confidence that the increase in fuel prices does increase Zomato’s delivery cost.
The food delivery firm however confessed that it was seeing some stress on the availability of delivery partners in the current quarter in select large cities but expressed confidence that the shortage was short-term in nature.
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