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Zomato's burn rate will reduce as food delivery has only 2 large players now, says Info Edge

Updated : May 29, 2019 12:00 PM IST

Info Edge (India), the owner of leading job portal naukri.com, reported a standalone net profit of Rs 66.31 crore for the March 2019 quarter. The company had posted a net loss of Rs 13.75 crore in the corresponding period last year. Its revenue from operations increased 21.6 percent to Rs 292.65 crore during the quarter under review from Rs 240.66 crore in the January-March 2018 period. Billing grew 18.6 percent year-on-year to Rs 360.9 crore in March 2019 quarter, while for 2018-19 it increased 20.5 percent to Rs 1,177 crore from the previous fiscal.

Info Edge in the fourth quarter FY19 reported a good margin performance with steady growth in Naukri.com. The real estate portal too maintained growth momentum.

Hitesh Oberoi, MD & CEO, Info Edge, shared his views about the performance and the outlook going ahead.

“In FY19, we did well in all four quarters largely because of pick up in IT hiring, especially in Bengaluru, Chennai and Hyderabad markets, but towards the end of the year there was pick up seen in non-IT markets such as Delhi, Mumbai and Pune as well,” Oberoi said.

99acres.com also started off on a good note, where the first half was good but there was a slight slowdown in Q4, he said, adding that the slowdown could be because of problems in the NBFC market. "If builders are not able to raise money they will not be able to start new projects and that could be a spoiler if things do not work out in the next few months," Oberoi added.

With regards to Zomato, Oberoi said, "The business has been growing by leaps and bounds, every month business grows 10-20 percent."

“A lot of it is fuelled by heavy discounting in the market and so the burn rate is also going up but now there are only two big delivery players that is Swiggy and Zomato. The business has expanded to 200 cities now," he said.

When asked about the loss of around Rs 2,000 crore in Zomato, Oberoi said right now the delivery market is seeing a ‘land grab’ sort of environment but sooner or later sanity will set into the market and companies will start making money.
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