• Firm dominates Indian food delivery along with SoftBank-backed Swiggy
• Zomato logged Q1 loss of $47.8m but delivered 100 million orders in 3 months
Shares in hit India startup Zomato Ltd rose more than 5% on Wednesday as investors dismissed quarterly loss figures – and instead focused on strong revenue growth in the food delivery firm’s first earnings report as a publicly listed company.
Zomato, which enjoyed a stellar market debut on July 23, had seen its shares tumble in the run-up to its quarterly results but on Wednesday its shares rose by as much as 5.3% to 131.80 rupees.
The firm had logged a consolidated net loss of 3.56 billion rupees ($47.79 million) for its first quarter due to higher expenses and its dining-out business taking a pandemic hit. It had reported a loss of 998 million rupees a year earlier.
However, Zomato’s first-quarter gross orders rose more than four times to 45.4 billion rupees from a year earlier, while revenue from operations more than tripled to 8.44 billion rupees, the company revealed in a filing on Tuesday.
Along with SoftBank Group-backed startup Swiggy, Zomato dominated the Indian food delivery market even before Covid-19 lockdowns boosted demand for their services.
Based in Gurugram, a satellite city of India’s capital New Delhi, the company generates most of its revenue from food delivery and related fees it charges restaurants. It also offers online table booking and special discounts at select restaurants.
Zomato said it had completed delivering a billion orders since it entered business in 2015, with over 10% of them done in the last three months.
The company’s revenue metrics were “significantly ahead” of Jefferies’ estimates, the brokerage said in a note, adding that it raised its forecast for Zomato’s fiscal 2022-24 revenues by around 10%-20%.
The loss was expected and market participants are more concerned about order numbers and revenue growth, Siddhartha Khemka, head of retail research at Motilal Oswal Securities in Mumbai, said.
- Reuters and Sean O’Meara