Zomato, a food delivery company, has turned its first full-year profit. It is now doubling down on the quick commerce business Blinkit, intending to add around 100 dark stones by the upcoming June.
Also, by the end of the 2024 financial year, the company is targeting around 1000 warehouses on Blinkit, which turned profitable in March. The revenue and gross order value of the company doubled in the fourth quarter. GOV is known to be the main metric for delivery companies because it measures the earned money for every trip.
The rising prominence of Blinkit in the entire Zomato ecosystem involving Hyperpure is not very surprising. Deepinder Goyal, the co-founder as well as the chief executive officer of the company, Zomato, acquired Blinkit in 2022 to become more massive than the food delivery business.
The swift expansion of Blinkit
Zomato added around 75 Blinkit stores from January to March. This leads to total warehouses of around 526, as the quick-commerce business is aiming to get close to buyers to easily capitalize via the customers who are fond of instant delivery of household essentials.
‘We have a presence in 26 cities; the focus is on the top eight cities of the country when it comes to expansion standpoint’, as per Albinder Dhindsa, who is the founder as well as CEO of Blinkit and was previously famous as Grofers. ‘Also, of the stores opened by us in the 4th quarter, 80% are in the leading eight cities.’
Even after this, Albinder said that the company is lacking a meaningful presence.
‘The second largest city, Bengaluru, is around 30% less than Delhi NCR’s GOV, along with the same gap in the count of stores. The goal for us in the upcoming quarters is to get Bengaluru along with other major cities such as Mumbai or Hyderabad to the penetration of Delhi NCR when it comes to store footprint as well as GOV’, as per Dhindsa. ‘This will separately lead the company to a four-times increase in the GOV.’
The initial full-year profit: Zomato
The company’s gross order value has increased 97% in the quarter of March, and revenue is more than doubling. Blinkit even got profitable on an EBITDA basis in March, as per the company.
‘Zomato’s commentary shows the company’s aggressive quick-commerce growth, which can lead to a valuation multiple re-rating,’ as per Karan Taurani, who is the research analyst at Elara Capital.
Overall, Zomato experienced a profit of around Rs. 175 crore in the quarter of March, up from a loss of around Rs. 188 crore. Therefore, the revenue from the operation saw an improvement of around Rs. 3582 crore from Rs. 2058 crore.
For the entire 2023–24 financial year, the company posted a Rs. 351 crore profit in comparison to a Rs. 971 crore loss the year before.
However, the shares of Zomato ended Monday’s tradition 2.3% lower at around Rs. 196.65 on the NSE, and the quarterly profit fell short of Rs. 187 crore, as per the Bloomberg analyst poll.
