Zomato has reported a net profit of Rs 175 crore for the January-March (Q4) period, marking the food aggregator’s fourth consecutive quarter of profitability. During this period, the company saw a significant year-on-year revenue increase of 73% to Rs 3,562 crore, despite challenges faced by the broader e-commerce sector due to high inflation and muted demand.
Compared to the same quarter last year, when Zomato recorded a net loss of Rs 188 crore and revenue of Rs 2,056 crore, the company has shown remarkable growth. The surge in profitability in its core business, coupled with the rapid expansion of its quick commerce arm, Blinkit, has been driving the company’s stock price upwards.
Zomato’s stock is currently trading at more than 100 times forward earnings, surpassing multiples for global peers such as Uber, Deliveroo, and Meituan. Goldman Sachs Group Inc. anticipates an increase in profit forecasts for Zomato’s Blinkit business, suggesting that earlier skepticism around the profitability of this model may dissipate as more results are reported.
ICICI Securities Ltd. analyst Abhishek Banerjee believes that Zomato’s rich valuations are justified, considering the significantly higher projected revenue and profits for the company. The stock’s performance has closely mirrored that of Doordash Inc. over the past six months, reflecting improving sentiment towards tech stocks globally.
Overall, Zomato’s continued profitability and robust revenue growth signal a promising trajectory for the company, positioning it as a strong player in the competitive e-commerce landscape.
