Zomato Q1 results preview: Revenue expected to rise substantially, losses may contract
Analysts believe Zomato may report improvement in margins, on the account of strong gross order value, growth in its quick commerce arm BlinkIt and higher number of gold members.
- Aug 3, 2023,
- Updated Aug 3, 2023 12:55 PM IST
Food delivery platform Zomato will announce its quarter earnings for the quarter ended on June 30, 2023 on Thursday and the company is likely to report a strong performance in terms of revenue growth and contraction in operational loss and bottomline in the first quarter of the ongoing fiscal. Zomato is likely to report a revenue around Rs 2,250-2,300 crore, a growth of 60 per cent on a year-on-year (YoY) basis, while quarter-on-quarter (QoQ) growth is also seen in double digits. The company may clock a net loss in the range of Rs 110-180 crore, while EBITDA loss is seen at around Rs 180-200 crore. Analysts believe that the company may report an improvement in margins, on the account of strong gross order value (GOV), better performance by its quick commerce arm BlinkIt and higher number of gold members. Management commentary for the future outlook will be the key for the businesses, as the brokerage firms. Kotak Institutional Equities pencils Zomato's revenue at Rs 2,267 crore in the June 2023 quarter, up 60 per cent YoY and 10 per cent QoQ. EBITDA may contract to Rs 199 crore, while the company may report a net loss of Rs 180 crore. Margins are seen improving substantially for Zomato. Kotak built in a 10 per cent sequential revenue growth on account of higher food delivery orders as well as contribution from Blinkit business. "We bake in a sequentially flattish contribution margin of 5.8% for the food delivery business. Overall, EBITDA loss of Zomato declined sequentially after lower losses in Blinkit and improved profits in the food delivery business," it said. Ahead of its results on Thursday, shares of Zomato cracked about 5 per cent to Rs 80.99, before making a quick recovery to Rs 84.17 with a total market capitalization of more than Rs 72,200 crore. The scrip had settled at Rs 84.90 crore in the previous trading session. ICICI Securities estimated Zomato’s food delivery GOV to grow 6.8 per cent QoQ in Q1FY24E, broadly in line with management commentary during the Q4FY23 earnings call aided by increased participation from Zomato Gold members. It estimates marginal improvement in food AOV as higher cart sizes should more than compensate for lower blended delivery charges. "We estimate food ordering contribution margin to expand by 50bps QoQ led by restaurant take rate improvements. We estimate Hyperpure business (B2B) to grow 12% QoQ and Blinkit to grow 13.6 per cent QoQ in Q1FY24E as both network density and reach improve," it added. ICICI Securities expects revenue at Rs 2,289 crore, up 11 per cent QoQ and 62 per cent YoY, while the company may narrow its EBITDA loss to Rs 156.5 crore, with a margin improvement. The food delivery player may report a net loss of Rs 135.6 crore, better on both YoY and QoQ basis. JM Financial sees total revenue at Rs 2,288 crroe, up 62 per cent YoY and 11 per cent QoQ, with an EBITDA loss of Rs 175 crore, thanks to improvement in the margins. The company may post a net loss of Rs 109 crore in Q1, much better performance in March 2023 and June 2022 quarters. "We are building a 8 per cent sequential growth in Food Delivery GOV in 1QFY24 driven by market share gains and seasonality. Growth would largely be driven by order volumes due to the presence of ‘Gold’ in the entire quarter and higher calendar days in June quarter," it said.
Food delivery platform Zomato will announce its quarter earnings for the quarter ended on June 30, 2023 on Thursday and the company is likely to report a strong performance in terms of revenue growth and contraction in operational loss and bottomline in the first quarter of the ongoing fiscal. Zomato is likely to report a revenue around Rs 2,250-2,300 crore, a growth of 60 per cent on a year-on-year (YoY) basis, while quarter-on-quarter (QoQ) growth is also seen in double digits. The company may clock a net loss in the range of Rs 110-180 crore, while EBITDA loss is seen at around Rs 180-200 crore. Analysts believe that the company may report an improvement in margins, on the account of strong gross order value (GOV), better performance by its quick commerce arm BlinkIt and higher number of gold members. Management commentary for the future outlook will be the key for the businesses, as the brokerage firms. Kotak Institutional Equities pencils Zomato's revenue at Rs 2,267 crore in the June 2023 quarter, up 60 per cent YoY and 10 per cent QoQ. EBITDA may contract to Rs 199 crore, while the company may report a net loss of Rs 180 crore. Margins are seen improving substantially for Zomato. Kotak built in a 10 per cent sequential revenue growth on account of higher food delivery orders as well as contribution from Blinkit business. "We bake in a sequentially flattish contribution margin of 5.8% for the food delivery business. Overall, EBITDA loss of Zomato declined sequentially after lower losses in Blinkit and improved profits in the food delivery business," it said. Ahead of its results on Thursday, shares of Zomato cracked about 5 per cent to Rs 80.99, before making a quick recovery to Rs 84.17 with a total market capitalization of more than Rs 72,200 crore. The scrip had settled at Rs 84.90 crore in the previous trading session. ICICI Securities estimated Zomato’s food delivery GOV to grow 6.8 per cent QoQ in Q1FY24E, broadly in line with management commentary during the Q4FY23 earnings call aided by increased participation from Zomato Gold members. It estimates marginal improvement in food AOV as higher cart sizes should more than compensate for lower blended delivery charges. "We estimate food ordering contribution margin to expand by 50bps QoQ led by restaurant take rate improvements. We estimate Hyperpure business (B2B) to grow 12% QoQ and Blinkit to grow 13.6 per cent QoQ in Q1FY24E as both network density and reach improve," it added. ICICI Securities expects revenue at Rs 2,289 crore, up 11 per cent QoQ and 62 per cent YoY, while the company may narrow its EBITDA loss to Rs 156.5 crore, with a margin improvement. The food delivery player may report a net loss of Rs 135.6 crore, better on both YoY and QoQ basis. JM Financial sees total revenue at Rs 2,288 crroe, up 62 per cent YoY and 11 per cent QoQ, with an EBITDA loss of Rs 175 crore, thanks to improvement in the margins. The company may post a net loss of Rs 109 crore in Q1, much better performance in March 2023 and June 2022 quarters. "We are building a 8 per cent sequential growth in Food Delivery GOV in 1QFY24 driven by market share gains and seasonality. Growth would largely be driven by order volumes due to the presence of ‘Gold’ in the entire quarter and higher calendar days in June quarter," it said.