Section 37
How Zomato went from listing to its first profit
How does a loss-making growth company prove it can make money?
- case
- Turnaround
- years
- 2021-2023
- ₹76 per share
- IPO issue price · 2021
- About ₹2 crore (vs loss of ₹186 crore a year earlier)
- Net profit, April-June 2023 quarter · 2023
- ₹2,416 crore
- Revenue from operations, April-June 2023 quarter · 2023
- 01
The situation
Zomato listed on the stock exchanges on 23 July 2021. Its IPO, priced at Rs 76 a share, was subscribed about 38 times, and the stock closed its first day about 66 per cent above the issue price on the BSE. But the company was still making losses.
- 02
The decision
In the following two years the company focused on growing revenue while improving margins in its main businesses. In its shareholder letter for the April-June 2023 quarter, CEO Deepinder Goyal said it had been simplifying its business.
- 03
The outcome
For the April-June 2023 quarter, Zomato reported its first-ever consolidated net profit of about Rs 2 crore, against a loss of Rs 186 crore a year earlier, on revenue of Rs 2,416 crore. Inc42 noted that a deferred tax credit of about Rs 17 crore helped, since the result before tax was still a small loss.