Food Aggregator shares fell by around 5.6% in the opening trade and touched their day’s low of Rs. 256 on BSE after the company’s board issued a report and announced a meeting on 22nd October.
Zomato plans to consider fundraising through equity share issuance through qualified institutions placement (QIP) subjected to Shareholder’s approval. Further, the Company has also announced that it will hold its earnings conference call on October 22, 2024.
The company had a turnaround after its initial fall during the Fed Interest hike which impacted tech companies across the world. From the food delivery business, they forayed into grocery delivery through the acquisition of BlinkIt. Over the period, the company had another turnaround that has reaped benefits for its shareholders.
The food and grocery delivery company in the recent July quarter reported a jump in net profit of Rs. 253 crore when compared to Rs. 2 crore a year earlier, with operating revenue rising 74% to Rs. 4,206 crore.
Over the period, exceeding analyst’s expectations on profit estimations had a huge impact on the stock. The Q1FY24, revenue growth was primarily driven by the quick-commerce business of Blinkit which was Rs. 942 crores in Q1FY25, a 22.5% QoQ increase compared to an 11.6% increase in the food delivery business.
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Hyper pure B2B play has even registered 27.44% QoQ growth in this quarter. The food delivery business and quick commerce are profitable compared to Hyperpure which is on the path to profitability.
However, with increasing competition in the quick commerce space can decrease margins over the period. Zomato recently announced a standalone app named District targeting going-out businesses which is for dining out, ticketing, and events.
Market analysts suggest that Blinkit is driving the upside in Zomato’s valuation as it extends its aggressive expansion plan. Chief Executive Albinder Dhindsa has also announced that Blinkit aims to have 2,000 dark stores by the end of 2026.
The company shows 0.00% promoter holding, 2.41% DIIs holding stood at 17.32% as per filings from the Q2FY25 quarter. The FII holding decreased from 54.11% in June to 52.53% in September.
Zomato operates as a platform that helps connect users, partner restaurants, and delivery partners. They also provide an application for the restaurants to advertise Their business to the target audience. Their segment includes India food ordering and delivery; Quick commerce business, Hyperpure supplies (B2B business); and other segments.
Written By: Santhosh
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