Zomato to focus its energies on food delivery, Hyperpure and quick commerce business Blinkit
Aim to achieve adjusted EBITDA break-even between Q4 FY23 and Q2 FY24: Zomato
Do not expect to make any other strategic minority investments in the foreseeable future: Zomato
At its first annual general meeting (AGM) since going public, Zomato said its business-to-business (B2B) supplies vertical Hyperpure could emerge as big as or even bigger than its food delivery business.
“We think that this business has the potential of becoming as large or even larger than our food delivery business because the addressable market here is potentially larger than food delivery,” Zomato Chairman Kaushik Dutta said.
He also added that Hyperpure is now starting to witness ‘strong adoption’ by restaurant partners. In the first quarter (Q1) of the financial year 2022-23 (FY23), Hyperpure’s revenue from operations soared 40% to INR 272.7 Cr from INR 194.2 Cr in the previous quarter.
Zomato executives also told shareholders that the company does not expect to make any other strategic minority investments in the foreseeable future and has decided to focus its energies on food delivery, Hyperpure and quick commerce business Blinkit.
“We have made all the investments that we needed to for our future plans and we do not expect to make any other strategic minority investments for the foreseeable future,” a Zomato executive said during the AGM.
Focus On Profitability
According to news reports, a total of 41 shareholders were registered as speakers for the event and around 10 of them questioned Zomato officials on issues ranging from profitability to acquisition of Blinkit.
In response to the questions, Zomato said that the company aims to achieve adjusted EBITDA break-even between the fourth quarter of FY23 and the Q2 of FY24.
The Gurugram-based foodtech major said that the startup was able to keep its ’adjusted EBITDA burn under control’ and achieve ‘strong top line growth’ in FY22 despite multiple challenges such as pandemic, macro-economic uncertainty, rising inflation, among others.
Reassuring shareholders, Zomato said that its core food delivery business is headed for profitability. Dutta was also quoted as saying that Blinkit has increased the company’s addressable market.
“The good news is that the business has never been more solid than what it is today, fundamentally. While we continue to grow, our losses are reducing dramatically and we expect that trajectory to continue,” CFO Akshant Goyal said.
Driver Safety & Share Prices
Responding to questions about safety of riders, CEO Deepinder Goyal said that Zomato does not incentivise riding dangerously. He also added that the company is looking at instituting measures to report erring riders.
“Delivery partner safety has always been a priority and no compromises have been or will be made here. We do not incentivise riders to be on time. We don’t even share the estimated time with the delivery partner. If anybody is speeding it is of their own accord. We will put phone numbers of the drivers on their bags and if they are speeding you (general public) can report it to us,” said Deepinder.
Fielding questions about the falling share prices of the company, CFO Goyal attributed it to global capital market correction and factors ‘beyond our control’.
The shares of Zomato took a beating following its acquisition of Blinkit in June this year. Zomato shares fell to an all-time low of INR 40.55 in the aftermath of the announcement, but have recovered since then.
On Tuesday (August 30), Zomato shares closed at INR 58, a far cry from a high of INR 169.10 of November last year. The market volatility and negative sentiment around the stock even saw marquee names such as Uber, Tiger Global, Moore and Sequoia selling their stake in the startup.
The foodtech major almost halved its consolidated net loss to INR 186 Cr in the first quarter of FY23 from INR 360 Cr during the same period of previous year. Revenue from operations also soared 63% year-on-year (YoY) to INR 1,413.9 Cr.
