Zomato's Q3 profit surges over 280% to Rs. 138cr
Zomato has reported a net profit of Rs. 138 crore for the October-December quarter, marking its third straight quarter of positive earnings. Net profit has jumped 283% quarter-on-quarter to beat estimates. Despite high inflation and subdued demand in the broader e-commerce sector, the company's revenue surged by 69% YoY to Rs. 3,288 crore. In comparison, Zomato posted a net loss of Rs. 347 crore and revenue of Rs. 1,948 crore during the same period last year.
Delivery costs increase by 63%
Zomato's delivery costs have climbed by 63% to Rs. 1,068 crore in Q3 FY24 from Rs. 655 crore in the previous year. However, the company has successfully curbed the growth of advertising and promotional expenses. The marketing costs only increased by 7% YoY to Rs. 374 crore. The food delivery gross order value rose by 6.3% QoQ and 27% YoY to Rs. 8,486 crore.
Factors driving Zomato's improved margins
Factors such as increased ad monetization and the introduction of platform fees have contributed to Zomato's improved margins. "We think it is too early to predict how the platform fee will shape up. Much like the Gold program, we are still testing the waters on what works and makes sense here from a long term perspective," said Rakesh Ranjan, the company's food delivery CEO. "We will continue to tactically use levers like these to optimize both growth and margin expansion."
