Zomato announced its April-June quarter results for the financial year 2021-22, reporting a net loss of ₹ 356 crore on a consolidated basis, compared to a loss of ₹ 99.8 crore in the year-ago period, due to higher expenses as the company’s dining-out business was impacted due to the COVID-19 pandemic.
This is the first quarterly earnings update of the country’s leading food aggregator since its stellar stock market debut last month.
On the other hand, the company’s operating revenue increased by 22% to Rs 844 crore in April- June quarter.
While Rs 806 crore of operational revenue came from India, the revenue of Rs 31 crore was logged from the UAE and the balance from other markets.
In July last Zomato became the country’s first unicorn to go public. It was a much-awaited public listing that has been advanced to July 23rd after a strong response from July 14-16.
Between July 14 and July 16, Zomato’s IPO, which was subscribed 44 times across all categories, was priced in the range of Rs 72-76 to raise Rs 9,375 crore. Of this, Rs 9,000 crore comprises fresh equity shares, and Rs 375 crore comes from a secondary share sale by Info Edge. Zomato will have a post-issue valuation of Rs 64,365 crore.
The company has raised Rs 4,197 crore from anchor investors, including marquee names such as Tiger Global, New World Fund, Fidelity, and domestic mutual funds such as HDFC, SBI, and Axis.
During the April-June quarter, the leading online food delivery service provider recorded its highest-ever gross order value, the number of orders, transacting users, as well as active delivery partners in its history.
The gross order value of the Indian food delivery business grew more than four-fold year-on-year to ₹ 4,540 crores in the April-June quarter, while the sequential growth compared to the preceding January-March quarter of fiscal 2020-21 was 37 percent.
However, a Statement coming from Zomato said, “”Revenue growth was largely on the back of growth in our core food delivery business which continued to grow despite the severe COVID wave starting April. On the other hand, COVID significantly impacted the dining-out business in Q1 FY22 reversing most of the gains the industry made in Q4 FY21″.
As per the statement the company earned good revenue despite the severity of Covid-19 in the last fiscal year but the impact of Covid-19 this year reversed the gain that it earned.
Zomato said the increase in losses is due “largely on account of non-cash Esop (employee stock ownership plan) expenses, which have increased meaningfully in Q1 of FY22 due to significant Esop grants made… according to the creation of a new Esop 2021 scheme.’
However, Zomata has been facing criticism from a section of delivery partners over poor pay and other operational practices.
Responding to this Zomato’s Co-founder Deepinder Goyal said, “The company claims the revised payout structure has guaranteed a 15% increase in earnings per order, compared to a year ago. Goyal said the top 20% of those who deliver on bikes and put in more than 40 hours a week receive a payout of more than Rs 27,000 in a month. “Perhaps, the reason why our delivery partners work with us is that they see higher earnings potential compared to other jobs/gigs available to them at the moment.”
In his first media interaction after the IPO, Goyal had touched upon the issue of dissent. “If two lakh people were unhappy with us, then why would they be working with us? They are the backbone of our business,” Goyal said.
