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Zomato Q4 net losses swell even as CEO Deepinder Goyal says growth ‘back on track’

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Zomato Q4 net losses swell even as CEO Deepinder Goyal says growth ‘back on track’


Goyal said he did not foresee 'post-COVID ramifications' affecting growth rate anymore, while acknowledging that Zomato has lost some of its delivery partners due to the post-COVID resurgence in the job market.

Zomato Q4 net losses swell even as CEO Deepinder Goyal says growth ‘back on track’

Online food delivery platform Zomato on May 23 reported widening of its consolidated net loss at Rs 359.7 crore in the fourth quarter ended March 2022, impacted by higher expenses. The company had posted a consolidated net loss of Rs 134.2 crore in the same period of the previous fiscal, Zomato said in a regulatory filing.

Consolidated revenue from operations during the quarter under review stood at Rs 1,211.8 crore, as against Rs 692.4 crore in the year-ago period. Total expenses during the fourth quarter rose to Rs 1,701.7 crore as against Rs 885 crore earlier, the company said.

For the fiscal ended March 31, 2022 as well, consolidated net loss increased to Rs 1,222.5 crore. The company had posted a consolidated net loss of Rs 816.4 crore in the previous financial year, the filing said. Revenue from operations in FY22 stood at Rs 4,192.4 crore as against Rs 1,993.8 crore in FY21, it said.

Commenting on the performance, Zomato Founder and CEO Deepinder Goyal said, "We think our growth trajectory is back on track, and we don't foresee 'post-COVID ramifications' affecting our growth rate anymore. Having said that, even before COVID, growth in our business has been lumpy (and not linear) — so it is essential to take a long term view of our business."

He further said Zomato is aiming for accelerated growth along with further reduction in losses and increasing profits in some time. "We are clear on what our long-term shareholders expect of us and we are working hard to deliver on both growth and profitability expectations," Goyal added.

On Blinkit deal

On reports of Zomato acquiring Blinkit (formerly Grofers), he said, "We have committed to give them a short term loan of up to USD 150 million to fund their short-term capital needs. Beyond that, there is nothing to share at this moment."

He, however, said, "We continue to remain bullish on quick commerce, especially given how synergistic it is to our core food delivery business, and are excited with the progress that Blinkit has made in this space. While there is a lot to do as the business is at its early stages, there's still a lot of low hanging fruit to drive growth and efficiency." Blinkit has grown well in the past six months, and has also significantly reduced its operating losses, Goyal added.

On 10-minute delivery

Commenting on Zomato Instant, the 10-minute food delivery service pilot, Goyal said the company is still studying to understand whether customers order more if delivery time reduces to 10 minutes, and is there a business model where delivery of food can be done in 10 minutes at the same or better contribution per order than the company's existing business.

"We do not have any answers here yet as the pilot has been live for a few days and only in one location," he said, adding some update on this could be expected in the next quarter and scaling it further would depend on the outcome of the current pilot.

On gig worker shortage

On the 'gig worker' shortage, he said Zomato is "seeing some stress on the availability of delivery partners in the current quarter in select large cities since the last week of April." While terming it as short-term in nature as the post-COVID economic recovery has brought back jobs in cities, he said the company lost some delivery partners to such jobs.

Moreover, Goyal said, all the workforce which migrated to their hometowns or villages during the first COVID-19 wave has not yet come back to the cities for work, "thus hampering our delivery partner acquisition rate." "We think things will normalise in a few weeks. We are also working on various long term initiatives to drive more stability of delivery partners in our fleet," he said.

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