Blinkit drives Zomato's profit from Rs 2 crore to Rs 253 crore in June quarter

Zomato Q1 profit surge: Food delivery major Zomato has posted multifold increase in its quarterly profits, driven by heightened demand for its quick commerce service Blinkit and its food delivery operations.

For the April-June quarter, Zomato's consolidated net profit surged to Rs 253 crore, a remarkable rise from Rs 2 crore in the same period last year. This result significantly exceeded analysts' expectations of Rs 215 crore, according to LSEG data.

The growth is attributed to the exceptional performance of Blinkit, Zomato's quick commerce platform, which experienced a 130 per cent increase in gross order value (GOV). The food delivery segment also saw a notable 27 per cent rise in GOV. These figures compare favorably to the 97 per cent and 28 per cent growth recorded in the previous quarter, respectively. Elara Capital had projected a GOV growth of 100 per cent for Blinkit and 20 per cent for the food delivery segment, underscoring Zomato’s ability to surpass expectations in a competitive market.

Karan Taurani, analyst at Elara Capital, highlighted that despite Blinkit's rapid expansion and new store openings, the company has effectively improved its EBITDA margin and is moving closer to achieving break-even EBITDA. This positive development is expected to lead to potential earnings upgrades as the company continues to scale its operations.

The ongoing heatwave, extending into June, further intensified the demand for food and grocery deliveries, benefiting Zomato’s services. Additionally, Zomato’s revenue for the June quarter surged by 74 per cent to Rs 4,206 crore, exceeding the analysts' forecast of Rs 3,928 crore. The company’s unit Hyperpure, which supplies raw materials to restaurants, recorded a substantial 96 per cent increase in revenue, reflecting strong growth in its B2B segment.

Zomato has also raised its platform fee by 20 per cent in April, contributing to improved margins and overall financial performance. Furthermore, the company is developing a new customer-facing app called District (by Zomato) aimed at enhancing dining-out experiences, although details about the app are still forthcoming.

Following the earnings announcement, Zomato's stock closed 2 per cent higher, marking a year-to-date gain of 89 per cent and reflecting investor confidence in the company’s growth trajectory and strategic initiatives.