Food delivery major Zomato on Tuesday reported a profit surge of 388.9 per cent during the fiscal second quarter at Rs 176 crore in comparison to Rs 36 crore recorded during the corresponding quarter of previous fiscal year. It recorded revenue from operations at Rs 4799 crore, up 68.5 per cent as against Rs 2848 crore during the same period of FY24. The company EBITDA stood at Rs 226 crore Vs EBITDA loss of Rs 47 crore YoY.
Zomato added 152 Blinkit stores during the quarter in review. While the food and grocery delivery firm said that most of its stores are profitable, Akshant Goyal, CFO, Zomato, maintained that addition of more new stores have been weighing on margins. “While most of our stores today are profitable with expanding margins, we are not seeing margin expansion at aggregate level at this moment because of the investments we are making towards scaling our infrastructure. This includes not just the stores that we are adding, but also the back-end large warehouses. For example, in Q2FY25, we added 152 net new stores and 7 warehouses. Since new stores and warehouses take a few months to ramp-up, they end up being margin dilutive in the short term,” he said.
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Zomato has been in a fierce competition with Swiggy which recently filed papers for an initial public offering. To combat the rising competition, analysts at Elara Capital said, Blinkit has been adding more stores to its network, which has hit Zomato’s profitability. While the company added 152 Blinkit stores during Q2, it had added 113 stores during Q1, 75 stores in Q4FY24, and 40 stores in Q3FY24
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In terms of GOV, Zomato said that GOV growth across the B2C businesses improved to 55 per cent YoY at Rs 17,670 crore in Q2FY25.
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