Food Delivery Company Zomato Climbs More Than 5% On Strong Revenue Growth
Shares in Indian food delivery company Zomato Ltd rose more than 5% on Wednesday August 11 as investors looked past a quarterly loss and focussed on strong revenue growth in the food delivery firm's first earnings report as a publicly listed company.
Based in Gurugram, a satellite city of India's capital New Delhi, the company generates most of its revenue from food delivery and related fees it charges restaurants. It also offers online table booking and special discounts at select restaurants.
First-Quarter Gross Orders And Revenue From Operations
Zomato's first-quarter gross orders rose more than four times to 45.4 billion rupees from a year earlier, while revenue from operations more than tripled to 8.44 billion rupees, the company said in a filing.
Dominating The Indian Food Delivery Market
Along with SoftBank Group-backed startup Swiggy, Zomato has dominated the Indian food delivery market even before COVID-19 lockdowns boosted demand for such services.
A Billion Orders Delivered
Zomato said that it had completed delivering a billion orders last week, with over 10% of them being done in the last three months.
Revenue Metrics "Significantly Ahead" Of Jefferies' Estimates
The company's revenue metrics are "significantly ahead" of Jefferies' estimates, the brokerage said in a note, adding that it raised its forecast for Zomato's fiscal 2022-24 revenues by approximately 10% to 20%.
More Concerned About Order Numbers And Revenue Growth
The loss was expected and market participants are more concerned about order numbers and revenue growth, head of retail research at Motilal Oswal Securities in Mumbai Siddhartha Khemka said.
Zomato, which had a stellar stock market debut in July, saw its shares tumble in the run-up to its quarterly results.
On Wednesday August 11, its shares rose as much as 5.3% to 131.80 rupees.
Consolidated Net Loss
Zomato logged a consolidated net loss of 3.56 billion rupees ($47.79 million) for its first quarter due to higher expenses and as its dining-out business took a hit due to the COVID-19 pandemic. It reported a loss of 998 million rupees a year earlier.