Zomato’s Q4 results:
Zomato recorded a net profit of Rs 175 crore in the January-March (Q4) period, marking its fourth consecutive quarter of profitability. This positive trend comes amidst a challenging landscape for the broader e-commerce sector, characterized by high inflation and subdued demand, with revenue rising by 73% year-on-year to Rs 3,562 crore.
In contrast, during the same quarter last year, Zomato had reported a net loss of Rs 188 crore and revenue of Rs 2,056 crore.
The company’s stock price has been on the rise, driven by increasing profitability in its core food delivery business and the rapid expansion of its quick commerce arm, Blinkit. Trading at over 100 times forward earnings, company’s valuation exceeds that of global peers like Uber, Deliveroo, and Meituan. Goldman Sachs Group Inc. anticipates upward revisions in profit forecasts for Zomato’s quick commerce business Blinkit. According to analyst Manish Adukia, earlier investor skepticism regarding the profitability of this business model should ease as more results are reported.
The rich valuations for company are seen as justified given the “significantly higher” projected revenue and profits for the company, according to Abhisek Banerjee, an analyst at ICICI Securities Ltd. Banerjee adds that the stock has closely tracked Doordash Inc. over the past six months, reflecting improving sentiment towards tech stocks globally.
