Zomato's shares surge 11% after announcing first-time profit in Q1
Zomato posted a surprise profit of Rs 2 crore in the first quarter of FY24, much ahead of its previous guidance of achieving profitability by the second quarter of FY24.
The shares of food delivery company surged 11% on Friday after the firm announced its first-ever profit in the June quarter of FY24. The price of a share stood at Rs 96 at the time of publication of this copy.
The stock is also at a one-year high, indicating optimism among investors.
The Deepinder Goyal-led company achieved profitability much earlier than its guidance of achieving the milestone by Q2 FY24. Operating revenue rose 71% to Rs 2,416 crore from Rs 1,414 crore last year, aided by massive growth in Hyperpure, the company's restaurant supplies vertical.
"Realistically speaking, we were expecting to hit this milestone in the September quarter (Q2 FY24), and we were being conservative in our earlier guidance. However, some critical parts of the team across our businesses out-executed our expectations/plans, and some of our initiatives delivered better outcomes than we had expected,” said Akshant Goyal, Chief Financial Officer of Zomato, in a shareholder's statement.
The company will continue to remain profitable going forward, with a 40%+ year-on-year topline (adjusted revenue) growth for at least the next couple of years, said the CFO.
The gross order value of food delivery, which witnessed a 14% increase compared to last year, was driven by robust growth in the number of orders as well as a modest uptick in average order value, said Rakesh Ranjan, CEO of the food delivery business.
The company aims to hit adjusted EBITDA breakeven for its quick-delivery platform in the next four quarters.
Zomato's shares had ended 1.65% higher on Thursday at Rs 86.45 apiece.
Edited by Swetha Kannan