Zomato Reports Profit Growth Despite Modest Revenue Increase in Q4 FY24

Preeti Bali / 7:21 am / May 14, 2024

Zomato, the leading Indian food delivery and quick commerce platform, released its financial results for the fourth quarter of the ongoing fiscal year (FY24) on Monday. The company reported a 26.8% increase in net profit to Rs 175 crore compared to Rs 138 crore in Q3 FY24. However, revenue from operations grew at a slower pace, rising by only 8.3% to Rs 3,562 crore compared to Rs 3,288 crore in the previous quarter.

Diversification Fuels Overall Revenue Growth

Despite the modest revenue increase in its core food delivery business, Zomato’s overall revenue for FY24 jumped a significant 71% to Rs 12,114 crore compared to Rs 7,079 crore in FY23. This growth can be attributed to the company’s successful diversification into new business segments.

Hyperpure and Blinkit Drive Growth

Income from Zomato’s B2B supply venture, Hyperpure, and its quick commerce platform, Blinkit, witnessed strong growth in Q4 FY24. Hyperpure’s revenue increased by 10.7% to Rs 951 crore, while Blinkit’s revenue surged by 19.4% to Rs 769 crore. This impressive performance demonstrates the success of Zomato’s expansion beyond its core food delivery business.

Profitability Driven by Cost Optimization

Zomato’s improved profitability in Q4 FY24 can be linked to its focus on cost optimization. The company implemented strategies to control delivery and related charges, which account for approximately 30.7% of its total expenditure. While these charges increased slightly by 4.7% to Rs 1,118 crore, the overall cost structure showed signs of improvement.

Blinkit Emerges as a Key Growth Driver

The rapid turnaround of Blinkit has been a major highlight for Zomato. The quick commerce platform’s impressive performance has shifted the spotlight to Swiggy’s Instamart, which appears to be lagging behind. With Blinkit’s continued growth, it’s possible that it may even overshadow Zomato’s core delivery business within a year.

Goyal’s Vision Proves Successful

This potential shift in Zomato’s business landscape reinforces the importance of Deepinder Goyal’s vision. His initial belief in Blinkit’s growth potential, met with skepticism at the time of acquisition, has proven to be remarkably accurate within a short timeframe.

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