Indian food delivery company Zomato surges as second quarter revenue doubles

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Indian food delivery company Zomato’s app can be seen on a mobile phone above its logo displayed in this illustration photo taken on July 14, 2021. REUTERS / Florence Lo / Illustration / File Photo

BENGALURU, Nov.11 (Reuters) – Shares of Indian food aggregator Zomato Ltd (ZOMT.NS) jumped 5.8% on Thursday, as investors looked beyond a larger quarterly loss to focus on strong revenues supported by strong food delivery activity and a rebound in the food service industry.

The Gurugram-based company, which generates most of its revenue from food delivery and the related fees it charges restaurants for using its platform, said its operating revenue jumped 140 , 2% to 10.24 billion rupees ($ 137.76 million) for the three months through September 30.

However, the company’s consolidated net loss soared almost 87% to 4.30 billion rupees from a loss of 2.30 billion rupees a year earlier.

Zomato attributed its losses to increased branding and marketing spending, expansion into smaller cities, and increased delivery costs due to rising fuel prices.

The increase in branding and marketing spending paid off, Zomato said, as its platform’s gross order value increased 158% to Rs.54.1 billion from the previous year. , thanks to a greater number of users making transactions.

The company said the delivery cost per order increased by 5 rupees in the second quarter compared to the first, due to a prolonged rainy season and a sharp increase in fuel prices.

Zomato also focused on the hyperlocal and fast-commerce segments, announcing investments in logistics technology company Shiprocket and the neighborhood savings and discovery app Magicpin.

He added that he would invest an additional $ 1 billion over the next 1-2 years, with much of it likely destined for fast trade – the space of delivering products in less than 30 minutes.

Jefferies analysts maintained their “buy” rating and said Zomato’s gross order value growth was a “big positive” but “at the expense of profitability.”

The company also plans to invest in fitness company CureFit.

As of 04:30 GMT, Zomato shares erased some gains and were up around 3.3%.

($ 1 = 74.3325 Indian rupees)

Reporting by Vishwadha Chander and Nallur Sethuraman in Bengaluru; Editing by Shailesh Kuber and Rashmi Aich

Our Standards: Thomson Reuters Trust Principles.


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