Online food delivery platform Zomato on Wednesday reported widening of its consolidated net loss to Rs 434.9 crore for the quarter ended September 30, 2021, mainly on account of investments in the growth of its food delivery business.
The company had posted a net loss of Rs 229.8 crore for the corresponding period of the previous fiscal, Zomato Ltd said in a regulatory filing.
Consolidated revenue from operations of the company stood at Rs 1,024.2 crore for the quarter under consideration. It was Rs 426 crore for the same period a year ago, it added.
The losses went up specifically due to three reasons — increased spending on branding and marketing for customer acquisition, increased investments and growing share of smaller/emerging geographies in the company’s business and increased delivery costs due to unpredictable weather and increase in fuel prices, they added.
On the long-term view of Zomato’s business, the letter said the three main parts of it are brutal prioritisation, that is divesting or shutting down any businesses which aren’t likely to drive exponential value for its shareholders in the long term.
Investing in the company’s core food businesses and the ecosystem around it to make it a robust long-term value drive, and building the hyperlocal e-commerce ecosystem by leveraging its key strengths to invest and partner with other companies to tap into growth opportunities beyond, it added.
“Our core food-related businesses food ordering and delivery, dining-out, and hyperpure (B2B supplies for restaurants) will remain the key value drivers for Zomato for the next few years. These are all complex businesses and we want our entire team to stay focused on these most important value drivers for our business,” the letter said.
Keeping this in mind, Zomato is in the process of divesting or shutting down its non-core businesses which were not going to significantly move the needle for shareholders in the long term.