Zomato's ad spends up 26% in Q1 FY25

Zomato recently released its quarterly financial results for the period ending June 30th, 2024. The revenue from operations turned out to be Rs 4206 crore, a 74% increase from previous year’s similar quarter income, which stood at Rs 2416 crore.

The company has posted advertising and sales promotion spends of 396 crore, a 26% increase from Rs 314 crore in Q1’24. This stood at Rs 389 crore during January-March 2024 quarter.

A larger other income component—which was ₹236 crore as opposed to ₹181 crore in the same quarter last year—has also contributed to profitability. 

The net profit for the online food delivery business stood at Rs 253 crore, which was Rs 175 crore in Q4’24. The same figure stood at Rs 2 crore in previous year’s similar quarter.

Zomato's quick-commerce company, Blinkit, revealed an adjusted EBITDA of ₹3 crore less than what was expected. The corporation exceeded their forecast of 100 outlets by adding 113 stores.

Speaking futuristically, Albinder Dhindsa, CEO of Grofers shared in an earnings call, “We see a line of sight of getting to about 2,000 stores for our current business. Most of these stores would be in top 10 cities in India. Beyond the large cities, the size of the market is still undiscovered. How fast we are able to get to this store count, will depend on how well we execute, i.e., how we build our team and how efficiently we scale our supply chain. Speed of execution also comes at the cost of lower short term margins, which we are okay with (but we don’t want to be mindless about it). If everything goes as planned, which usually doesn’t, we plan to get to 2,000 stores, latest by the end of 2026 while remaining profitable.”

Deepinder Goyal, CEO of Zomato said, “Today, Zomato and Blinkit are our two large consumer businesses and both of them serve customers' needs at home. However, we also have one of India’s largest ‘going-out’ businesses. Our dining-out business which helps our customers discover restaurants when they want to go out and dine at restaurants. This dining-out business is now operating at a run-rate of $500m+ annualised GOV and is already profitable.”

He said that there is an opportunity to further expand the going-out offering, building on top of the dining-out business. Additional use cases for customers in the going out space include - movies, sports ticketing, live performances, shopping, staycations etc., some of which they have already launched, or are building. Building a one stop destination app for going-out could be a game changer for each of these use cases, and Zomato intends to do exactly that with their new District (by Zomato) app. 

“If we execute this well, we see going-out becoming the 3rd large B2C business emerging out of Zomato,” he said.