Zomato Delivers Below Expectation Profit In Q4; Stock Dips 4%
Rise in advertisement expenses due to stiff competition contributes to below estimate profit
Stocks of Zomato slumped more than 4 per cent in the Tuesday trading session after the online food aggregator platform missed profit estimates in its fourth quarter earnings.
The stock traded at Rs 190 with 2.21 per cent loss in the morning session on the National Stock Exchange (NSE).
Zomato registered a surge of 26.8 per cent in the consolidated net profit to Rs 175 crore for the fourth quarter of FY 23-24 as compared to analysts’ expectations of Rs 188 crore.
The lower than expected profit is attributed to rise in advertisement expenses due to stiff competition.
Notably, the company reported a net loss of Rs 188 crore during the corresponding period last year.
The company's revenue from operations during the Q4 FY 23-24 reported at Rs 3,562 crores, last year during the same period the revenue was at Rs 2,056 crore, according to a filing to the exchange by the company.
This is the fourth instance when the company recorded profit in the earnings.
According to an exchange filing by the company, it further revealed that its year-on-year (YoY) topline growth has accelerated to an impressive 61 per cent, exceeding the stated outlook of 40 per cent.
"On the profitability front, consolidated Adjusted EBITDA was Rs 194 crore and improved by Rs 369 crore as compared to the same quarter last year. Quick commerce business turned Adjusted EBITDA profitable in the month of March and Hyperpure losses also reduced meaningfully" said Akshant Goyal, CFO, Zomato.
The company attributed this growth to robust performances in both food delivery and quick commerce segments. Meanwhile, the company's bottom line continues to expand, with Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) reaching Rs 194 crore.
In terms of stock performance, Zomato has surged more than 50 per cent in the 2024 so far.
