Shares of Zomato rose nearly 9 percent in early deals on Tuesday after the company posted better than expected results for the June quarter (Q1FY23).
Its consolidated loss eased to ₹186 crore in Q1FY23 against ₹359 crore in the same quarter last year. It was also lower than the loss of ₹359.7 crore posted in the March quarter.
Its revenue for the quarter under review rose over 67 percent to ₹1,413.9 crore versus ₹844.4 crore logged in the year-ago quarter.
The company further announced that its revenue growth was driven by a 10 percent QoQ jump in gross order value (GOV) to ₹6,430 crore in Q1FY23 on the back of robust growth in order volumes.
The management also noted that on the profitability front, the food delivery business hit an important milestone last quarter by getting to adjusted Ebitda break-even. Zomato also stated that its average monthly transacting customers have increased by 36 percent year-on-year (YoY) while the average monthly order frequency has also increased by 10 percent during the same period.
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“Our focus on profitability has sharpened over the past few months with the change in market context, without compromising our focus on growth. We are doing that by assessing everything with a critical lens and allocating resources by taking a long-term view to sustainable growth, as well as profit,” said Deepinder Goyal, CEO at Zomato.
Talking on inflation, the management noted that there is definitely a negative impact on the demand side but it is hard to quantify that in our business at this point, given multiple moving parts.
"Similarly, on the cost side, the margin is getting negatively impacted due to higher fuel costs and wage inflation. Having said that, the overall efficiency gains have helped us make good progress on improving contribution margins," said Akshant Goyal, CFO, Zomato.
The stock rose as much as 8.8 percent in intraday deals to ₹50.45.