Zomato turned profitable for the first time in 15 years.


Zomato turned profitable for the first time in 15 years in the first quarter of fiscal year 2024 (Q1 FY24). The company reported a net profit of Rs 2 crore in Q1 FY24, compared to a loss of Rs 186 crore in the same period last year. This was a result of several factors, including:

  • Increased revenue from food delivery: Zomato's revenue from food delivery grew by 70% year-on-year to Rs 2,416 crore in Q1 FY24. This was driven by several factors, including the continued recovery in demand for food delivery, the increasing popularity of Zomato's Gold subscription program, and the expansion of Zomato's restaurant network.
  • Reduction in losses from quick commerce business: Zomato's fast commerce business, Blinkit, turned contribution positive for the first time in June 2023. This was a significant milestone for Zomato, as Blinkit had been a major drain on the company's finances.
  • Improved operational efficiency: Zomato has been working to improve its operational efficiency in recent quarters. This has resulted in lower costs and improved profitability.

Zomato's profitability is a positive sign for the company and for the food delivery industry as a whole. It shows that the industry is maturing and that companies are starting to find ways to make money. However, it is important to note that Zomato's profitability is still fragile. The company will need to continue to focus on improving its operational efficiency and reducing its losses from the quick commerce business to sustain its profitability in the long term.

Here are some additional details about Zomato's profit strategy:

  • Augmenting profits in food delivery: Zomato is focusing on increasing the average order value (AOV) and the frequency of orders from its existing customers. The company is also expanding its restaurant network and adding new features to its platform, such as the ability to order food from multiple restaurants at once.
  • Curbing losses in the quick commerce (Blinkit) division: Zomato is focusing on making Blinkit more efficient and profitable. The company is cutting costs, expanding its network of dark stores, and increasing the number of products it offers.
  • Investing in new growth areas: Zomato is also investing in new growth areas, such as grocery delivery and online payments. The company believes that these areas have the potential to be significant drivers of growth in the future.

It will be interesting to see how Zomato's profitability evolves in the coming quarters. If the company can continue to improve its operational efficiency and reduce its losses from the quick commerce business, it could become a sustainable profitable business in the long term.

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