Zomato reports net loss of Rs 63 crore in Q3

Revenue from operations rose 82.47% to ₹1,112 crore for the December quarter as against ₹609 crore in the year-ago quarter.

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Food aggregator Zomato on Thursday reported a consolidated net loss of ₹63 crore for the quarter ending 31 December 2021. The firm had posted a net loss of ₹352.6 crore in the year-ago period. The company had posted a net loss of Rs 429 crore in the previous September quarter.

Revenue from operations rose 82.47% to ₹1,112 crore for the December quarter as against ₹609 crore in the year-ago quarter.

Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) loss reduced to 270 crore in the third quarter as compared to 310 crore ($41 million) in the previous quarter (Q2FY22), driven by rationalizing spending across various businesses and functions.

The company’s gross order value (GOV) grew by 84.5% year-on-year and 1.7% quarter-on-quarter to 5,500 crore in the reporting quarter.

The number of orders grew 93% YoY and 5% QoQ. Average order value (AOV, which includes customer delivery charges) narrowed by 3% QoQ, mostly on account of reduction in customer delivery charges. The contribution of (as a %) GOV for the food delivery business was 1.1% in Q3 FY22 as compared to 1.2% in Q2 FY22.

“We re-distributed our growth investments more in favour of discounts on customer delivery charges vis-a-vis food coupons. Why? We are seeing a higher return on investment with discounted delivery charges as compared to coupons. As a result, discounts per order were reduced by ₹5 per order in the last quarter as compared to Q2 FY22. Part of the reduction in customer delivery charges is also because we started operations in 180 new cities (we are now in a total of 700+ cities), where we introduced temporary free delivery to cultivate a culture of ordering food from restaurants,” Zomato said.
Customer delivery charges over the years have grown steadily as a strong validation of the convenience that our platform offers. Given the meaningful size of customer delivery charges today, we are now able to use this as a lever (in addition to food coupons) to drive growth on our platform. Adjusted revenue saw a 78% growth to 1,420 crore on a Y-o-Y basis, while on a sequential the company saw a flat quarter.

The company said its revenue from operations grew by about 9% quarter-on-quarter (QoQ), while the customer delivery charges fell by 22%. “This was driven by ₹7.5 per order reduction in customer delivery charges in Q3FY22 as compared to Q2FY22,” it added.

“Zooming out from the current quarter, we remain focused on the bigger picture and the long-term growth potential of our food ordering and delivery business in the years ahead,” the company said in a filing. Zomato said it continues to benefit from the changes it is helping to drive in the overall restaurant industry.

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