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Informist, Tuesday, Jul 30, 2024

By Anjali Singh

MUMBAI - Food delivery company Zomato Ltd is expected to report strong earnings in the June quarter after the company turned profitable in the last financial year. Higher platform fees and robust growth in its fast-growing subsidiary Blinkit and the wholesale restaurant supply business Hyperpure will likely drive the growth in the company's key financials.

The Gurugram-based company is likely to report a net profit of 2.61 bln rupees in Apr-Jun, against a net profit of 20 mln rupees a year ago, according to an average of the estimates from three brokerage houses. Sequentially, the net profit is seen up 49.3%. According to the average of the estimates, the consolidated revenue is seen at 39.70 bln rupees, up 64.3% on year and 11.5% sequentially.

Kotak Institutional Equities expects a revenue growth of 59% on year in the reporting quarter "driven by 35% yoy growth in food delivery revenues, 65% yoy growth in Hyperpure revenues and 125% yoy growth in Blinkit revenues." The growth will be supported by the food delivery's gross merchandise value, which is seen 23% higher on year and the rest from the year-on-year take rate expansion, the brokerage house said. Take rate is the percentage of revenue Zomato retains from each transaction facilitated between customers, and gross order value is the total financial value of all food delivery orders placed on Zomato.

The restaurant aggregator's earnings before interest, tax, depreciation and amortisation profit is seen at 1.73 bln rupees in the June quarter. The EBITDA projections range from 1.28 bln rupees and 2.40 bln rupees.

Blinkit, the company's quick-commerce service, is expected to report a minor sequential loss in the June quarter. "... We do not expect EBITDA break-even yet as a large dark store addition may be a drag on profitability," Kotak Institutional Equities said. However, ICICI Securities expects Blinkit's adjusted revenue to grow 26% on quarter and 153% on year, while Hyperpure's business adjusted revenue is seen growing 15.7% sequentially and 78% on year.

With the company scheduled to detail its earnings for Apr-Jun on Thursday, investors will closely track the management's comments on growth in gross order value, food delivery margins, and Blinkit's business operations. At 1304 IST, shares of the company were 0.8% higher at 228.65 rupees. 

Following are the Apr-Jun earnings estimates of the company based on reports from three brokerage houses compiled by Informist, in mln rupees:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Vidhi Verma

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