Revenue from operations stood at Rs 1661.30 crore in Q2 September 2022, up 62.2% from Rs 1024.20 crore reported in Q2 September 2021.

Total adjusted revenue grew 48% year-on-year to Rs 2107 crore (38% year-on-year ex-quick commerce).

Total adjusted EBITDA loss reduced to Rs 192 crore compared with Rs 310 crore in Q2FY22. Adjusted EBITDA loss (ex-quick commerce) was Rs 60 crore for the quarter (compared to INR 150 crore in Q1FY23).

In a letter to shareholders, Deepinder Goyal, chief executive officer, said "We expect the Adjusted EBITDA loss (ex-quick commerce) to come down further and eventually get to break-even in the next 2 to 4 quarters."

During the quarter, total expenses rose 30.1% to Rs 2079.40 crore. Delivery and related charges expense were recorded at Rs 590.30 crore (up 39.68%). Advertisment and sales promotion expense stood at Rs 299.7 crore (down 22.76%). Employee benefit expense were at Rs 381.30 crore (down 10.1%).

Finance cost surged 283.9% to Rs 11.90 crore in Q2 September 2022 over Q2 September 2021.

In the food delivery business, Gross Order Value ("GOV") growth was 3% QoQ (23% YoY) driven by growth in both order volumes and average order value. Growth in revenue per order led to a higher Adjusted Revenue (for food delivery) growth of 8% QoQ (27% YoY).

Average monthly transacting customers grew 4.4% QoQ to 17.5 million in Q2FY23 as compared to 16.7 million in Q1FY23.

On the profitability front, contribution margin (as a % of GOV) improved meaningfully from 2.8% in Q1FY23 to 4.5% in Q2FY23. As a result, the food delivery Adjusted EBITDA hit break-even in Q2FY23.

The increase in contribution margin is driven by improvements on both cost and revenue side. In Q2FY23, 248 cities out of 1,000+ cities were contribution positive. These 248 cities contributed ~91% of overall GOV in Q2FY23.

"This has been the result of scale, and heightened focus on profitability over the last few quarters. In our view, none of these improvements in contribution margin are temporary in nature," Goyal said.

Acquisition of Blinkit (quick commerce) closed on 10 August 2022. Hence, this quarter includes ~50 days of Blinkit financials consolidated into overall financials.

Blinkit's GOV grew 26% quarter-on-quarter to Rs 1482 crore while the revenue grew 44% quarter-on-quarter. Adjusted EBITDA loss in quick commerce reduced to Rs 259 crore from Rs 326 crore in the previous quarter (Q1FY23) leading to adjusted EBITDA (as a % of GOV) of -17.5% in Q2FY23 compared with -27.8% in Q1FY23.

Hyperpure revenue grew 23% QoQ (199% YoY) to INR 3.34 billion in Q2FY23. Adjusted EBITDA losses increased to INR 0.53 billion as compared to INR 0.44 billion in Q1FY23 while Adjusted EBITDA margin stayed flat at -16% in Q2FY23 vis-a-vis Q1FY23.

Goyal said, "While our food delivery business has been growing and steadily moving towards profitability, I believe there is room for the business to grow much faster than what it is currently trending at. The restaurant and food delivery industry in India is still nascent and we need to relentlessly execute to tap into the large opportunity. As far as quick commerce is concerned, we haven't seen any/much slowdown in the business. But that could be the low base effect, in addition to relatively low penetration due to the early stage nature of that business."

With reference to the Blinkit acquisition, Goyal said "As we see this business more closely, our level of excitement has only increased. Our hypothesis seems to be playing out on both strong customer adoption as well as the core economic model. The team integration was quick and turned out great (not saying it was easy). I know that most investors currently ascribe zero value to the Blinkit business, and that's understandable. But I am confident this will change in due course of time."

On capital allocation plan, he said "there are no plans to make any new minority investments, nor has there been any change in our capital allocation plans since the last quarter. We have our plates full with three potentially large businesses — food delivery, Hyperpure, and quick commerce. We have been on the look-out for new and potentially large growth ideas for the long term growth of our business — e.g. Intercity Legends (intercity food delivery), and Zomato Instant (food delivery in 10-15 minutes); but these are innovations within the “food delivery” business, and are relatively low investment initiatives. Any capital used by these two initiatives will be well within our overall capital allocation plan for the food delivery business."

Net cash from operating activities stood at Rs -433 crore in six months ended 30 September 2022 compared with Rs -270.30 crore in six months ended 30 September 2021.

Zomato connects customers, restaurant partners and delivery partners. Customers use Zomato to search and discover restaurants, read and write customer generated reviews and view and upload photos, order food delivery, book a table and make payments while dining-out at restaurants. On the other hand, it provides restaurant partners with industry-specific marketing tools which enable them to engage and acquire customers to grow their business while also providing a reliable and efficient last mile delivery service. The company also operates a one-stop procurement solution, Hyperpure, which supplies high quality ingredients and kitchen products to restaurant partners.