Zomato lands in a sweet spot after remarkable recovery

livemint.com:

Zomato actually has several other revenue streams and significant ‘other Income’. While the company has done well to tighten operations to improve margins, revenue growth–more orders, more users–depends on consumption. Excellent third-quarter results with high growth confirm anecdotal evidence about a consumption rebound in certain segments of the economy.

There are more orders, more users, and more restaurants in the food-delivery segment. This is also feeding into stronger growth in Hyperpure, Zomato’s restaurant supply business. Zomato has gained market share in quick commerce, partly due to the weakness of a main competitor and partly because it has clawed market share from unorganised retail in small towns.

Zomato does quick commerce through Blinkit, which it acquired in 2022, while Hyperpure supplies produce from farm to restaurants. Plus, there’s advertising revenue from restaurants, and dining-out revenues. In addition, the cash stash (money raised from Zomato’s IPO and its venture capital funding that has not yet been invested) earns over ₹200 crore in revenue per quarter, so treasury operations are also important.

Total revenue grew to ₹3,288 crore in the December quarter from ₹1,948 cr in the corresponding year-earlier period, and from ₹2,848 crore in the preceding September quarter. Zomato also swung to an Ebitda profit of ₹51 crore in the third quarter, from an Ebitda loss of ₹366 crore in the same year-ago period, and an Ebitda loss of ₹47 crore in the second quarter of this fiscal year. Zomato’s other income (treasury contribution) increased to ₹218 crore in the third quarter, from ₹173 crore a year earlier, and ₹212 crore in the second quarter.