Zomato, India’s leading food delivery platform, reported a net profit of Rs 36 crore in the second quarter of the current financial year (Q2 FY24), beating analyst estimates. The company’s revenue from operations surged 71.5% year-on-year (YoY) to Rs 2,848 crore, which is also higher than Street expectations of Rs 2,607 crore.
Zomato’s profitability improved further in Q2 FY24, with its adjusted EBITDA margin coming in at 2.5%. This is a significant improvement from the negative EBITDA margin of 2.8% reported in the same quarter last year.
What can be the possible factors for Zomato’s Growth?
The company’s strong revenue growth in Q2 FY24 was driven by a combination of factors, including:
- Increased order volume: Zomato’s order volume grew 26% YoY to 46.6 million orders in Q2 FY24. This growth was driven by a strong recovery in the dine-in segment, as well as continued growth in the online food delivery segment.
- Higher average order value (AOV): Zomato’s AOV increased 37% YoY to Rs 582 in Q2 FY24. This was driven by an increase in the number of items ordered per order, as well as an increase in the price of food items.
- Improved cost control: Zomato’s cost control measures, such as streamlining its operations and reducing its marketing expenses, also helped to boost its profitability in Q2 FY24.
Zomato’s management is confident that the company can maintain its strong growth momentum in the coming quarters. The company is planning to invest heavily in expanding its dine-in business, as well as launching new initiatives in the online food delivery segment.
What is the Analysts’ View on Zomato’s Q2 results?
Analysts were upbeat on Zomato’s Q2 FY24 results, with many of them raising their price targets for the stock.
“Zomato’s Q2 FY24 results were better-than-expected on both revenue and profitability fronts,” said an analyst at a leading brokerage firm. “The company’s strong revenue growth was driven by a combination of factors, including increased order volume, higher AOV, and improved cost control. We are confident that Zomato can maintain its strong growth momentum in the coming quarters, driven by its expansion in the dine-in segment and new initiatives in the online food delivery segment.”
What do Zomato’s Q2 results mean for investors?
Zomato’s Q2 FY24 results were a pleasant surprise for investors, indicating that the firm is on track to meet its long-term growth targets. The company’s high revenue growth and improved profitability are optimistic signals, indicating that Zomato is well-positioned to gain from India’s booming online meal delivery sector.
Investors should keep a close eye on Zomato’s performance in the future quarters, particularly its revenue growth, profitability, and development ambitions. If the company can continue to execute on its strategy and produce solid results, it might be a suitable investment for investors eager to capitalise on India’s growing online meal delivery sector.
What are Zomato’s Expansion Plans?
Zomato is planning to invest heavily in expanding its dine-in business in the coming quarters. The company is targeting to increase its dine-in network from the current 20,000 restaurants to 50,000 restaurants by the end of FY25.
Zomato is also planning to launch new initiatives in the online food delivery segment, such as a quick delivery service and a subscription service. The company is also
