Zomato surges 14% on turning profitable for first time

Shares of food delivery service provider Zomato Ltd. rose as much as 14.11 per cent to hit an intraday high of Rs 98.39 after the company reported profit for first time since getting listed in 2021.

Zomato posted its first-ever profit on Thursday, one quarter earlier than expected, helped by a tax gain and strong orders in its food and grocery delivery businesses.

Zomato expected to hit this milestone in the September quarter, said Chief Financial Officer Akshant Goyal, adding that they were being conservative with that guidance.

Zomato expects its business to remain profitable going forward while delivering a 40 per cent year-on-year topline growth for at least the next couple of years, he said.

Zomato gross order value

Gross order value (GOV) -- the total value of all orders, a percentage of which Zomato gets as revenue -- rose 13.9 per cent in its food delivery business.

GOV for its quick delivery business Blinkit surged 82.6 per cent in the quarter year-on-year, growing 4.6 per cent sequentially. It faced a temporary business disruption in April resulting from a change in the payout structure for delivery partners.

We faced a challenging period of around 45 days, when the number of overall gig workers available to work in our system was 15-20 per cent lower than normal, said Albinder Dhindsa, Blinkit's CEO.

Zomato bought Blinkit last June for Rs 4,447 crore as its response to the fierce competition in the quick-delivery market.

"Blinkit's GOV is very close to Zomato's GOV in some of the large cities where we have an overlapping presence," said Zomato CEO Deepinder Goyal.

The Gurgaon-based company posted a consolidated net profit of Rs 2 crore for the quarter ended June 30, compared to a loss of Rs 186 crore a year ago.

Zomato had a deferred tax gain of Rs 17 crore this quarter.

Revenue from operations rose 70.9 per cent to Rs 2,416 crore in the quarter, beating analysts' estimates, according to Refinitiv IBES data.

As of 11:38 am, Zomato shares traded 11.58 per cent higher at Rs 96.20, outperforming the Sensex which was up 0.7 per cent.

(With Reuters inputs)