Zomato's net profit jumps 389% YoY, board approves Rs 8,500 crore fund-raise proposal

Food and grocery delivery behemoth Zomato declared its Q2FY25 results today. The company's revenue from operations stood at Rs 4,799 crore, up from Rs 2,848 crore from the year-ago period. Zomato's GOV (gross order value) for its B2C business was at Rs 17,670 crore, a 55% YoY growth. On a like-for-like basis, i.e., excluding the impact of the acquisition of Paytm's ticketing business, the GOV growth stood at 53% YoY.

However, the company's net profit skyrocketed, jumping by 389% YoY. For the quarter ended September 30, 2024, Zomato's net profit stood at Rs 176 crore, significantly up from the Rs 36 crore level in the year-ago period.

Ahead of the IPO of rival food and grocery delivery competitor Swiggy, Zomato's board also approved the raising of Rs 8,500 crore through qualified institutional placement of equity shares.

“While the business is now generating cash (vis-à-vis a loss-making business at the time of the IPO), we believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today,” said the company, explaining the fundraise.

Additionally, in a letter to shareholders, Founder and CEO Deepinder Goyal shared that the "District" app, a new platform aimed at consolidating going-out services such as dining, movies, sports ticketing, live performances, shopping, and staycations, is expected to go live within the next month.

"At this point, we are focused on making sure we do a good job at migrating the business from the Zomato and Paytm platforms to the new District app," Goyal added.

During the reported quarter, Zomato made many notable acquisitions, which include Orbgen Technologies Private Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL). These were the holding companies of Paytm's' movie ticketing' business and events business, respectively.

In the letter to shareholders, the company's Chief Financial Officer, Akshant Goyal, shared that its cash balance had reduced by Rs 1,726 crore as compared to the previous quarter, mainly on account of the deal consideration of Rs 2,014 crore for the acquisition of Paytm's entertainment ticketing business.".

Blinkit, Zomato's quick commerce business, saw a 129% year-on-year growth in adjusted revenues, which touched Rs 1,156 crore. Blinkit's gross order value (GOV) also saw a 122% year-on-year increase to Rs 6,132 crore.

Blinkit saw massive improvements on almost all operational metrics. The average order value jumped from Rs 607 in the year-ago period to Rs 660 in Q2 FY25. The average GOV per day per store also inched up from 757 in Q2FY24 to 981 in Q2FY25. Similarly, orders also skyrocketed from 45.5 million in the year-ago period to 92.9 million for the quarter ended September 30, 2024.

As for Zomato's food delivery business, the average monthly transacting users also inched up from 18.4 million in Q2 FY24 to 20.7 million in Q2 FY25.

The results did not do much to move Zomato's stock on the bourses, which fell by 3.44% during the day to close at Rs 256.55.