Zomato net loss widens to ₹ 356 crore in first earnings since IPO

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Zomato announced its April-June quarter results for the financial year 2021-22, reporting a net loss of ₹ 356 crore on a consolidated basis, compared to a loss of ₹ 99.8 crore in the year-ago period, due to higher expenses as the company’s dining-out business was impacted due to the COVID-19 pandemic. This is the first quarterly earnings update of the country’s leading food aggregator since its stellar stock market debut last month.

  1. The newly listed company’s revenue from operations in the first quarter of the current fiscal stood at ₹ 844 crore, compared to ₹ 266 crore in the corresponding period last year, marking a three-fold increase year-on-year.
  2. ”Revenue growth was largely on the back of growth in our core food delivery business which continued to grow despite the severe COVID wave starting April. On the other hand, COVID significantly impacted the dining-out business in Q1 FY22 reversing most of the gains the industry made in Q4 FY21,” said Zomato in its statement.
  3. The company’s total expenses in the June quarter stood at ₹ 1,259 crore, compared to ₹ 383 crore in the corresponding quarter last year, according to a regulatory filing by the firm to the stock exchanges.
  4. During the April-June quarter, the leading online food delivery service provider recorded its highest-ever gross order value, the number of orders, transacting users, as well as active delivery partners in its history.
  5. The gross order value of the Indian food delivery business grew more than four-fold year-on-year to ₹ 4,540 crore in the April-June quarter, while the sequential growth compared to the preceding January-March quarter of fiscal 2020-21 was 37 per cent.
  6. ”…our India food delivery business continues to remain contribution positive; although the contribution margin reduced slightly in Q1 FY22 as compared to the previous quarter on account of growth investments in addition to the costlier business environment (due to lockdowns) in which this growth was achieved,” added Zomato.
  7. Zomato’s non-cash employee stock ownership plan (ESOP) expenses increased in the June quarter, due to significant ESOP grants made for the creation of a new ESOP 2021 scheme.
  8. On July 23, Zomato achieved a market capitalisation of Rs 1.08 lakh crore on the BSE making it one of the few listed entities to enter the ₹ 1 lakh crore market cap club upon stock market debut.
  9. Zomato’s Rs 9,375 crore initial public offering (IPO) paved the way for other leading digital firms, such as Paytm, Flipkart, Ola, to go public. Backed by China’s Ant Group, it became first Indian mega startup to take the public route.
  10. Ahead of the announcement of quarterly results, shares of Zomato declined 4.22 per cent to settle at ₹ 124.95 apiece on the BSE on Tuesday, August 10.

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