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Published: May 11, 2024
Updated: May 11, 2024

Zomato's Profit likely to surge : Q4 Earnings Preview

Anticipated Growth:

Zomato, the online food delivery giant, is poised to maintain its impressive performance in the first quarter of 2024, following a string of successful quarters. Analysts project a substantial year-on-year revenue increase of up to 75%, fueled by robust food delivery and hyperpure segments. Sequentially, revenue growth is estimated to fall within the range of 3-9%.

Profit Projections:

Expectations for the fourth quarter suggest a significant quarter-on-quarter increase in net profit, potentially rising by up to 48%. This follows a remarkable jump of nearly fourfold in the previous quarter, underscoring the company's profitability trajectory. In the corresponding quarter of the previous year, Zomato had reported a loss of Rs 187 crore.

Performance Overview:

In the preceding quarter, Zomato witnessed a staggering 283% quarter-on-quarter surge in net profit, reaching Rs 138 crore. This surge was complemented by a robust 69% year-on-year increase in revenue from operations, amounting to Rs 3,288 crore. These figures signify the platform's substantial growth and escalating demand for its services.

Insights from Kotak Equities

According to Kotak Equities, revenue growth for the fourth quarter of FY24 is expected to be primarily driven by a 41% year-on-year growth in food delivery revenues, along with significant increases in Hyperpure and Blinkit revenues. Despite a projected 3% sequential revenue decline due to seasonal factors, Zomato is expected to achieve a quarter-on-quarter increase in segment EBITDA, supported by a higher contribution margin in the food delivery segment.

Strategic Analysis

Furthermore, Kotak Equities anticipates a sequential reduction in losses in the Blinkit business, driven by increased throughput of existing stores and a rapid scale-up of new stores. This strategic approach aligns with Zomato's efforts to optimize its operations and enhance profitability across its various business verticals.

As Zomato prepares to unveil its fourth-quarter earnings, all indications point towards another robust performance, building upon its previous successes. With strong revenue growth projections and an anticipated surge in profits, the company continues to solidify its position as a leading player in the online food delivery industry.