Zomato Records Historic Milestone: Reports First-Ever Quarterly Profit, Shares Surge 14%

Zomato Records Historic Milestone: Reports First-Ever Quarterly Profit, Shares Surge 14%

Zomato Ltd, the popular online food delivery firm, experienced a significant surge in its share price, rising over 14% during morning trade on Friday. This increase came in the wake of the company’s announcement that it had achieved its first-ever consolidated profit after tax of ₹2 crore in the first quarter of the financial year 2023-24.

The remarkable performance led to a surge in investor confidence, driving the stock price to reach its 52-week high of ₹98.39 on the Bombay Stock Exchange (BSE). The positive financial results and the company’s milestone of turning profitable for the first time attracted investors and market participants, resulting in the substantial increase in the share price.

Zomato’s growth and profitability signify a positive outlook for the company in the highly competitive online food delivery market. The achievement of profitability reflects successful business strategies and operational efficiencies, instilling further confidence in its future prospects. The company’s performance in the coming quarters will be closely monitored by investors and industry analysts as it continues to navigate the dynamic and evolving landscape of the food delivery sector in India.

Zomato’s impressive performance continued at the National Stock Exchange (NSE), where its share price rallied 13.69% to reach its 52-week peak of ₹98.40. The significant increase in the stock price demonstrated the market’s positive response to the company’s first-ever consolidated profit after tax announcement.

The surge in investor interest was evident in the trading volume, with 70.26 lakh shares of Zomato being traded at the BSE and over 19.30 crore shares at the NSE during morning deals. The high trading volume reflects the heightened market activity and the heightened interest in Zomato’s stock following its positive financial results.

In comparison to the same quarter in the previous fiscal year, where the company reported a net loss of ₹186 crore, Zomato’s latest financial report showcases a remarkable turnaround with a consolidated profit after tax of ₹2 crore. This significant improvement in financial performance signals a positive trajectory for the company and reinforces investor confidence in its growth prospects.

The positive financial results and increasing profitability position Zomato as a leading player in the online food delivery industry in India and demonstrate its ability to navigate the competitive landscape and achieve sustainable growth. As the company continues to expand its operations and offerings, its performance will continue to be closely watched by investors and stakeholders in the market.

Zomato’s consolidated revenue from operations for the first quarter of the current fiscal year stood at ₹2,416 crore, a significant increase compared to ₹1,414 crore in the same period last year. This robust growth in revenue reflects the company’s successful expansion and increasing market penetration in the online food delivery and dining segment.

However, the company also experienced higher total expenses in the first quarter, amounting to ₹2,612 crore, compared to ₹1,768 crore in the corresponding quarter of the previous fiscal year. The increase in expenses could be attributed to various factors, including investments in business expansion, marketing initiatives, technology infrastructure, and operational costs.

Despite the higher total expenses, Zomato managed to achieve its first-ever consolidated profit after tax of ₹2 crore in the April-June quarter of the current fiscal year. This signifies the company’s ability to balance its growth strategies while also focusing on achieving profitability.

As Zomato continues to strengthen its position in the highly competitive food delivery market and explore new opportunities, the company’s financial performance will be closely watched by investors and industry observers. The positive momentum showcased by Zomato’s financial results is likely to boost investor confidence and support its growth trajectory in the coming quarters.

Zomato’s Managing Director and CEO, Deepinder Goyal, expressed the company’s commitment to streamlining its operations and organizational structure in a letter to shareholders. He emphasized the company’s efforts to make its business less complex, indicating a focus on optimizing internal processes and enhancing operational efficiency.

Goyal also highlighted the importance of having the right talent in key positions within the company’s various business units. Placing the right people in the right roles ensures effective decision-making, fosters innovation, and strengthens Zomato’s overall capabilities to meet its business goals.

By making these strategic moves, Zomato aims to create a more agile and responsive organization, capable of adapting to market dynamics and customer demands. Simplifying the business and aligning the right talent are essential steps in Zomato’s journey to remain competitive and sustain its growth in the highly competitive food delivery and dining industry. The company’s focus on optimization and talent management indicates a commitment to driving long-term success and delivering value to its shareholders.

In May, Zomato’s CEO Deepinder Goyal had expressed confidence in the company’s ability to achieve profitability for the entire business within the next four quarters. This statement reflects the company’s optimistic outlook and determination to improve its financial performance.

By aiming to achieve profitability within the next four quarters, Zomato is likely taking strategic measures to enhance revenue generation, control costs, and optimize its operations. As evident from the recent financial results, Zomato’s first-ever consolidated profit after tax in the April-June quarter of 2023-24 demonstrates progress towards this goal.

While the food delivery and dining industry can be highly competitive and capital-intensive, Zomato’s focus on growth and profitability is crucial to establish its position as a sustainable and successful business. As the company continues to refine its strategies and capitalize on market opportunities, achieving profitability within the specified timeline would be a significant milestone and demonstrate its commitment to delivering value to shareholders and stakeholders alike.