Shares of online food delivery firm Zomato Ltd surged over 5 per cent on Friday following the company's announcement of a consolidated net profit of Rs 138 crore for the third quarter ended December 31, 2023.
The stock reached a 52-week high of Rs 151.45 on the BSE, marking a 5.17 per cent increase. Similarly, on the NSE, it rose by 5 per cent to reach Rs 151.40, also hitting its 52-week high level.
Zomato Ltd's revenue surged by 69 per cent year-on-year to reach Rs 3,288 crore, contrasting with the challenges faced by the broader e-commerce sector amidst high inflation and subdued demand. In comparison to the same quarter last year when the company reported a net loss of Rs 347 crore and revenue of Rs 1,948 crore, this marks a significant improvement.
Despite a 63 per cent increase in delivery costs to Rs 1,068 crore from Rs 655 crore in the year-ago period, Zomato managed to control the growth of advertising and promotional expenses during this quarter. Marketing expenses only saw a modest 7 per cent rise year-on-year to Rs 374 crore, while revenue soared by 69 per cent.
Zomato's food delivery gross order value climbed by 6.3 per cent quarter-on-quarter and 27 per cent year-on-year to Rs 8,486 crore, aligning with the company's guidance for the quarter. This indicates a certain level of predictability in the company's performance, despite experiencing a significant surge in orders on 2023 New Year's Eve.
The company's strong performance can be attributed to the enhancement of its economies of scale, resulting in increased profitability per order as well as a surge in subscriptions to its loyalty programme.
As of 11:50 am, shares of Zomato were trading at Rs 146.10, 1.39 per cent higher than the previous close on the NSE.
(With PTI inputs)
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