Shares of Zomato have turned multi-bagger in the calendar year 2023, with their share price doubling from around ₹60 to ₹122 apiece levels, thanks to improvement in its profitability as well as expansion in food delivery and Blinkit businesses. The food-tech heavyweight touched a fresh 52-week high in intraday trade on Monday as investors cheered its strong earnings in the second quarter ended September 30, 2023.

Early today, Zomato shares opened higher for the third straight session on Monday, up 2.8% at ₹119.60 against the previous closing price of ₹116.40 on the BSE. Extending opening gains, the stock rallied as much as 4.8% to touch a new 52-week high of ₹121.95 on the BSE, while the market capitalisation rose to ₹1.03 lakh crore. In the last three sessions, the stock has risen 17.5% in the last three sessions.

The share price of Zomato has risen 175% in nearly eight months after hitting its 52-week low of ₹44.35 touched on January 25, 2023. The counter surged 84% in a year; 85% in six months; and 15% in a month after analysts turned bullish on the stock, expecting the online food delivery platform to see a rise in orders and restaurant partnerships during the ICC World Cup as well as the festive season. 

Zomato shares have gained over 13% in two days after the Deepinder Goyal-led firm reported a consolidated net profit of ₹36 crore in Q2FY24, compared with a profit of ₹2 crore in the June quarter of FY24 and a loss of ₹251 crore in the corresponding quarter last year. 

The consolidated revenue from operation jumped 71.46% year-on-year (YoY) to ₹2,848 crore compared with ₹1,661 crore in the same quarter last year. Sequentially, the revenue climbed 17.9% from ₹2,416 crore in Q1 FY24.

“The growth momentum we witnessed in Q1FY24 continued in Q2FY24 driven by healthy growth across all our businesses,” says Deepinder Goyal, Founder & CEO, Zomato.

This is the second consecutive profitable quarter for the company with adjusted EBITDA of ₹41 crore as compared to ₹12 crore profit in the previous quarter (Q1FY24), Zomato said in its earnings report.

During the quarter under review, Zomato’s quick commerce arm, Blinkit turned contribution positive for the first time. In Q2FY24, Blinkit’s contribution margin, as a percentage of Gross Order Value (GOV), rose to 1.3%, from -7.3 % in Q2FY23, when Zomato had acquired the instant grocery delivery service company. The GOV across B2C businesses (food delivery + quick commerce + Going-out) grew at 13% QoQ and 47% YoY, it said in its earnings report.

 “GOV growth was largely driven by same-store sales growth as we continue to focus on serving more customer needs and ensuring consistency of service levels. We also saw a net addition of 28 new stores during the quarter, taking our overall store count to 411 stores as of the end of the quarter,” says Albinder Dhindsa, Founder & CEO, Blinkit.

Going forward, the company aims to break even in the quick commerce business by Q1FY25.

Meanwhile, the food delivery business reported adjusted revenue of ₹1,925 crore in Q2FY24 from ₹1,742 crore in Q1FY24. The food delivery GOV grew 9% QoQ and 20% YoY, driven by growth in order volumes and growing adoption of the Gold program (3.8 million members as of Q2FY24 end, which contributed around 40% of GOV in the food delivery business).

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