Barely three weeks after making a stellar debut on bourses, Indian food delivery company Zomato on Tuesday posted a loss of INR 3.6 billion (USD 48.4 million) on the revenue of INR 9.16 billion (USD 123 million) in the first quarter of the financial year (FY) 2022.
Compared to the previous quarter, the company’s losses widened 168%, while the total income went up 22%, whereas on a year-on-year basis, the losses ballooned 260%, and revenue jumped 223%. Revenue from operations stood at INR 8.4 billion (USD 113 million), of which India contributed INR 8.09 billion, and the UAE contributed INR 316 million, while the rest came from other markets.
Although Zomato’s share fell 4% ahead of the results, they climbed up over 6% on Wednesday as market analysts deemed the company’s revenue growth strong, on the back of reviving demand.
“Revenue growth was largely on the back of growth in our core food delivery business, which continued to grow despite the severe COVID-19 wave starting in April,” Deepinder Goyal, Zomato’s co-founder and CEO, stated in regulatory filings.
The food delivery business in India reported the highest ever GOV, the number of orders, transacting users, active restaurant partners, and active delivery partners till date in any quarter in Zomato’s history, Goyal added.
Zomato’s gross order value for food delivery in India in Q1 FY 2022 grew by 37% sequentially to INR 45.4 billion (USD 605 million) from INR 33.1 billion (USD 442 million) in the Q4 FY 2021. Gross order value represents the total monetary value of all food delivery orders placed online on Zomato, including taxes, customer delivery charges, gross of all discounts, excluding tips.
Zomato, which entered the food delivery segment in 2015, also completed a billion orders on its platform last week, stated Goyal.
“It took us six years to get to this milestone, and we hope it takes us much less time to deliver the next billion,” he said. “The fact that over 10% of these billion orders were delivered only in the last three months makes us confident about getting to the next billion much sooner.”
However, Goyal noted that COVID-19 “significantly impacted the dining-out business in Q1 FY 2022 reversing most of the gains the industry made in Q4 FY 2021.” Zomato also witnessed increasing losses in Hyperpure, its business-to-business arm, which provides supplies for restaurant partners “due to investment in growth.”
Goyal stated the Q1 FY 2022 was “one of the most challenging quarters” for his team.
“As the second COVID-19 wave ravaged the nation, we were left scrambling to work on multiple things at the same time. At the peak of the second wave, almost 35% of our employees were battling COVID-19 in their households,” he said.