Zomato shares are in focus after the company announced plans to raise up to ₹8,500 crore through a qualified institutions placement (QIP). This move, approved by the board on October 22, is aimed at strengthening Zomato’s balance sheet in the face of increasing competition.
As of 9:23 am the shares were trading 3.86% lower at ₹246.45 on NSE
Strong Q2 FY25 Results:
- Revenue: Zomato posted robust revenue growth, reporting ₹4,799 crore for Q2 FY25, a 68.5% year-on-year (YoY) increase from ₹2,848 crore in Q2 FY24, and a 14.1% quarter-on-quarter (QoQ) rise from ₹4,206 crore in Q1 FY25.
- Net Profit: The company’s net profit surged to ₹176 crore, reflecting a significant 388.9% YoY increase from ₹36 crore in Q2 FY24, though it declined 30.4% QoQ from ₹253 crore in Q1 FY25.
- EBITDA: Zomato reported a positive EBITDA of ₹226 crore, a notable turnaround from a loss of ₹47 crore in Q2 FY24.
- EBITDA Margin: The EBITDA margin stood at 4.71%, showcasing improved operational efficiency.
Capital Strategy:
Zomato highlighted the reduction in its cash balance by ₹1,726 crore, largely due to a ₹2,014 crore acquisition of Paytm’s entertainment ticketing business. While the company is now cash-generating, it aims to boost its financial reserves to maintain a level playing field with competitors in the fast-growing food delivery sector.
Zomato’s strong operational performance and focus on maintaining service quality underline its ongoing commitment to scaling its business.
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