Q2 2025 Zomato Ltd Earnings Call Transcript
Key Points
- Zomato Ltd (BOM:543320) reported a significant year-on-year growth of over 120% to 130% in its quick commerce business, indicating robust expansion.
- The company is successfully expanding its presence beyond Delhi NCR, with the share of business from this region falling below 40%, showing growth in other major metros.
- Average Order Values (AOVs) in the top seven cities are similar, with some non-Delhi markets even surpassing Delhi, indicating strong performance across regions.
- Zomato Ltd (BOM:543320) has launched Blinkit in over 40 markets, demonstrating its aggressive expansion strategy in quick commerce.
- The company is focused on maintaining good service levels and sustainable profitability, even amidst heightened competition and market expansion.
- Zomato Ltd (BOM:543320) faces increasing competition in the quick commerce space, with new entrants like Flipkart and existing peers raising capital.
- The company's take rates have been somewhat flattish, attributed to the higher velocity of new store openings and the mix of new stores.
- There is a noticeable increase in fixed costs, particularly in the quick commerce segment, due to store and warehouse expansions.
- Despite the growth, Zomato Ltd (BOM:543320) has not seen any contribution margin expansion in recent quarters, largely due to ongoing expansion efforts.
- The company has not yet decided on implementing a loyalty program for its quick commerce business, which could be a disadvantage compared to competitors who have such programs.
Ladies and gentlemen, a very good evening and welcome to Zomato Limited's Q2 FY25 earnings conference call. From Zomato's management team, we have with us today Deepinder Goyal, Founder and CEO; Akshant Goyal, Chief Financial Officer; Abinder Dhindsa, Founder; and Kunal Swarup, Head of Corporate Development.
Before we begin a few quick announcements for the attendees, anything said on this call which reflects outlook for the future or which could be construed as a forward-looking statement may involve risks and uncertainties, such statements or comments are not guarantees of future performance and actual results may differ from those statements.
(Operator Instructions)
Vivek Maheshwari, Jefferies.
Hi, good evening. My first question is on the quick commerce competition, you have addressed some parts of this in the letter. But how do you think about the next few quarters given that, given that there is a capital raise, you are doing everybody, your peers are also doing on top of that, Flipkart
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