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Zomato's Q3 FY25 financial results:
1. Growth Overview (GOV Growth) 📈
Overall GOV: Increased by 57% year-over-year (YoY) to ₹20,206 crore.
Segment Breakdown:
Food Delivery 🍔: Grew by 17% YoY.
Quick Commerce 🛒: Increased by 120% YoY.
Going-Out 🎫: Skyrocketed by 191% YoY.
2. Revenue Growth 💸
Consolidated Revenue: Rose by 58% YoY to ₹5,746 crore. Revenue this year could reach nearly 19000 Cr.
3. Segmental Growth 📊
Quick commerce and Going-out segments experienced substantial growth, contributing significantly to the revenue and GOV increases.
4. Profit Margins Comparison (Q3 FY25 vs. Q3 FY24) 📉
Adjusted EBITDA Margin: Improved in the food delivery segment from 3.0% of GOV last year to 4.3% this year, indicating better profitability.
5. Profit Growth 🚀
Adjusted EBITDA: Grew by 128% YoY to ₹285 crore. Profit could trigger near to 750 Cr this year.
6. Industry Key Performance Indicators (KPIs) 🔑
Strong customer retention in the quick commerce business.
Increased store count currently at 1000 for quick commerce to estimate of 2000 till December 25 and warehousing space in line with rapid expansion plans.
7. Ratios at CMP of 242 🔢
Trail EPS reached 0.76 and at the price of 242 Trail PE is 304. However, considering strong growth if we check F-EPS it could reach 0.91, Hence F_PE could be estimated at 254 which is high in relation to growth.
8. Discussion Highlights from Shareholders' Letter 📜
Investments and Expansion: Management discussed investing heavily in quick commerce expansion, which impacted short-term profitability but is expected to lead to earlier than planned store count targets.
Future Strategy: They plan to continue the aggressive expansion, especially in the quick commerce segment.
9. Growth Outlook 🌟
Near Term: Expected continued investments might pressure profit margins, though growth in GOV is likely to remain robust.
Long Term: As expansion phases mature, profitability is anticipated to improve significantly, reflecting a strong long-term growth trajectory.
10. Investor's Perspective 👀
Investors might be concerned about short-term profitability due to high expansion costs but could be optimistic about long-term prospects due to strong segment growth, market expansion, and improving operational efficiencies.
Zomato's Q3 FY25 shows a dynamic growth trajectory, driven by expansion in new business segments and strong growth in existing ones, though accompanied by short-term profitability challenges due to aggressive investment in expansion.
