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Informist, Thursday, Jan. 16, 2025

 

By Rajesh Gajra

 

NEW DELHI – Retail food and grocery delivery and business-to-business supplies company Zomato Ltd. may see a slight deceleration in growth in key metrics in the quarter ended December. On a year-on-year basis, Zomato's top-line growth in the December quarter may be the slowest in nine quarters, while growth in net profit may be the slowest in three quarters, according to an average of estimates from brokerages.

 

Sequentially, the company's revenue growth for the December quarter is projected to be the lowest in three quarters, while the bottom line may grow higher than the September quarter but lower than the four quarters before that.

 

Zomato is seen reporting a consolidated net profit of INR 2.44 billion and revenue from operations of INR 54.43 billion in the December quarter, according to the average of estimates from seven brokerages. The operating profit, as denoted by the earnings before interest, tax, depreciation, and amortisation, will likely be INR 2.66 billion, as per the average of estimates from six brokerages.

 

The projected net profit is 77% higher than a year ago and 39% higher than a quarter ago. In the September quarter, Zomato reported a consolidated net profit of INR 1.76 billion, up 4.9 times from a year ago but 30% lower sequentially.

 

The top line in the December quarter is projected to rise 66% from a year ago and 13.4% sequentially. In the September quarter, the company's revenue grew 69% on year and 14.1% sequentially. 

 

There is some moderation in growth expectations from Zomato, Kotak Securities said in a report. The brokerage expects Zomato's revenue growth for the December quarter to come in at 62% on year, driven by 24% growth in food delivery revenues, 83% in Hyperpure revenues and 124% in Blinkit revenues.

 

Hyperpure is a B2B business that supplies food ingredients and other products to restaurants and other B2B buyers. In the September quarter, Hyperpure revenues had nearly doubled from a year ago to INR 14.73 billion, while food delivery revenue rose 21% on year to INR 23.40 billion. Quick commerce revenue, which is mainly Blinkit revenue, had risen 2.3 times on year to INR 11.56 billion.

 

On the profitability in the December quarter, brokerage firm Motilal Oswal Financial Services expects the adjusted EBITDA margin, calculated as adjusted EBITDA as a percentage of gross order value, of the food delivery business to inch up by 10 bps to 3.6%, while Kotak Securities estimates it to go up to 3.7%. For the Blinkit business, Kotak Securities expects a minor EBITDA loss "as new store addition will offset higher profitability of older stores." Motilal Oswal Financial also expects the adjusted EBIDTA margin for Blinkit to be at a loss at (-)0.1%.

 

The net profit growth in the December quarter will largely trail the growth in revenue and EBITDA. The company will declare its financial results for the December quarter on Monday. "The outlook on Blinkit, growth and margins are the key monitorables," according to Motilal Oswal Financial.

 

On Thursday, shares of Zomato ended 0.8% down at INR 241.90 on the National Stock Exchange.

 

Following are the Oct-Dec consolidated earnings estimates for Zomato based on reports from seven brokerage firms in descending order by the estimate of net profit:

 

Brokerage firm	Net Sales	Net Profit	EBITDA
	(In INR million)
Elara Securities (India) Pvt Ltd	56,030	3,076	2,801
JM Financial Institutional Securities Pvt Ltd	54,232	2,901	3,134
Emkay Global Financial Services Ltd	53,888	2,855	2,525
Motilal Oswal Financial Services Ltd	54,648	2,673	2,583
Kotak Institutional Equities	53,280	2,246	2,696
Anand Rathi Share and Stock Brokers Ltd	54,304	1,690	----
Nuvama Wealth Management Ltd	54,635	1,644	2,233
Average	54,431	2,441	2,662

 

End

 

Edited by Saji George Titus

 

 

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