Zomato Q3 Results Review – Blinkit Losses Drag Performance; Food Delivery Slowdown Visible: Dolat Capital

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Zomato Ltd. reported revenue growth of 17.3% QoQ (our estimate: 15%), at Rs 19 billion. Q3 included full-quarter consolidation of Blinkit. Growth beat however, was led by Hyperpure and others (ME delivery and advertising) segments, growing 26% & 54% respectively.

For food delivery, gross order value growth remained sluggish, while monthly transacting users declined 0.6% QoQ to 17.4 million, (implying high single digit decline in order growth), leading to adjusted revenue of Rs 15.6 billion, a decline of 1% QoQ.

Zomato’s Ebitda margin rose slightly to -18.8% (our estimate: -16.3%) from -18.7% in Q2. Miss is attributed to higher loss in Blinkit, while food delivery biz saw better economics, with adjusted Ebitda management of 0.3% on gross order value (achieved breakeven in Q2).

We believe that declining order/monthly transacting users metrics clearly suggest that a large part of consumer adoption is incentivised and thus slipped as quickly as discounts withdrew.

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