Zomato reports first-ever net profit at Rs 2 crore, making share prices jump 14%

Zomato, the perpetually loss-making company, has made its first-ever net profit for the April-June quarter. Zomato recorded a net profit of Rs 2 crore after tax for the quarter ending in June 2023, compared to a loss of Rs 186 crore in the year before.

However, the food tech company's expenses still outweigh revenue and it is losing money in its operations.

• Zomato CEO Deepinder Goyal shared the uplifting news of becoming profitable on X (formerly Twitter) saying that the company is proud to have achieved the milestone ahead of its expectations. 

#Profitability
Our consolidated business (incl Blinkit) is now Adjusted EBITDA and PAT positive (for the first time ever!).

We are proud to have achieved this milestone earlier than expected.

(2/n)

— Deepinder Goyal (@deepigoyal) August 3, 2023

• To be sure, Zomato's Rs 2 crore net profits come a quarter ahead of its expectations. 

The impact

• The news helped Zomato's shares jump over 14% in value in the morning trade on August 4. 

• Zomato attributed its small success in part to the loyalty programme offered to its customers, Zomato Gold. Zomato Gold contributes to about 30% of the company's main food delivery business. 
• On the other hand, Zomato's other two units, B2B Hyperpure supplies and quick-commerce Blinkit are still bleeding money. 

Reactions

• Several people congratulated Zomato on achieving the milestone. MoS Rajeev Chandrasekhar called the company a beacon for all investors and startups.

Congratulations!

This is a bright beacon to all investors n startups that a path to profitability can & must be the outcome that all Indian Tech startups work to achieving 👍🏻 https://t.co/1SwW5l7k0q

— Rajeev Chandrasekhar 🇮🇳 (@Rajeev_GoI) August 3, 2023

• Paytm CEO Vijay Shekhar Sharma also congratulated Zomato and Blinkit team for their achievement. 

Thank you 🫶 https://t.co/KjdnbWbbS0

— Deepinder Goyal (@deepigoyal) August 3, 2023

• There were also some who indulged in some harmless roasting of Zomato. In one case, an X platform user said he would have given the company Rs 2 crore and they didn't have to go door-to-door delivering food. 

Tweet of the day. ROFL! https://t.co/LPJJ86YEyq

— Deepinder Goyal (@deepigoyal) August 3, 2023

• Goyal took it in graciously with a reply. 

[ALSO READ: Someone sold Zomato shares worth Rs 15 crore via a block deal. What is it?]