Zomato Q1 loss widens but sales jump as more people order food online

Food delivery platform Zomato Ltd’s consolidated net loss widened during the three months through June, but its revenue jumped as more people ordered online due to stay-at-home curbs to tackle the Covid-19 pandemic.
Net loss for the April-June quarter expanded to Rs 356.2 crore from Rs 99.8 crore a year earlier and Rs 130.8 crore in the January-March period, the company said Tuesday. 

Adjusted revenue, which includes revenue from operations and customer delivery charges, grew 26% quarter-over-quarter to Rs 1,160 crore from Rs 920 crore and more than tripled from Rs 350 crore in the first quarter of last year.

Zomato said the year-on-year growth in sales is “irrelevant” and “unnaturally high” since the April-June period of 2020 was severely impacted by the first wave of lockdowns.

This is the first time that Zomato is disclosing its quarterly earnings. The company went public last month after raising Rs 9,000 crore through an initial public offering that was covered 38 times.

Other key details:
    1. Adjusted EBITDA loss widened to Rs 170 crore in Q1 from Rs 120 crore in Q4 FY21.
    2. India food delivery gross order value in Q1 grew 37% to Rs 4,540 crore from Rs 3,310 crore in Q4 FY21.
    3. The company had 310,000 active delivery partners in July, the highest ever.

Management commentary:

Zomato Founder and CEO Deepinder Goyal said revenue growth was largely on the back of growth in the core food delivery business, which continued to grow despite the severe Covid-19 wave starting April. 
However, the pandemic significantly impacted the dining-out business in Q1, reversing most of the gains the industry made in Q4 FY21. This also led to an increased in adjusted EBITDA losses.
The company said the India food delivery business reported the highest ever gross order value, number of orders, transacting users, active restaurant partners and active delivery partners till date in any quarter in its history.
Goyal also said that the company will do earnings and analyst calls only once a year, at the end of each fiscal year, where it will share a more detailed commentary on the year gone by along with key metrics.