Will evaluate shareholders’ requests for dividends, but no decision yet: Zomato CFO Akshant Goyal

Food and grocery delivery platform Zomato, which posted its first ever quarterly profit earlier this month, said it currently has no plans to pay dividends to shareholders but will look into doing so in future, chief financial officer Akshant Goyal said at the company’s annual general meeting on Wednesday.

“We’ll continue evaluating that as we go along. At this point there is nothing that we’ve decided. But hopefully in future at some point, we are hoping to be able to give dividends to our shareholders,” he said, responding to shareholders’ requests for dividend payouts.

On August 3, the company reported a maiden consolidated net profit of Rs 2 crore for the quarter ended June 2023, as against a loss of Rs 186 crore a year ago. The profitable turn came on the back of higher order frequencies from its loyalty programme, Gold. Its revenue from operations in the quarter saw a nearly 71% on-year jump to Rs 2,416 crore.

Zomato also said in the exchange filing that its quick commerce arm, Blinkit, had reported a positive contribution margin for the first time ever in the month of June 2023.

Addressing the question of when Blinkit will turn profitable, Goyal reiterated that it is expected to become adjusted Ebitda break-even by the first quarter of FY25 – four quarters from now. This guidance was shared in the company’s last shareholder letter, he said. “We believe at this point we are firmly on the path to achieve that,” he added.

Shareholders also posed questions on Zomato’s plans for the next five years, and whether it was looking to enter any new businesses. Goyal said the company would continue to focus on its existing businesses as there was more room for growth in those segments.

“We believe there is huge room for growth in all of these businesses. Food delivery, for example, we believe is still a nascent market. Indian consumers have only just started eating from restaurants, and that habit and behaviours and demographics are changing fast,” he said.

Currently, Zomato is present in food delivery, quick commerce through Blinkit, B2B groceries through Hyperpure, and dining out and events.

The growth in the existing businesses is sufficient to deliver the over 40% annual adjusted revenue growth over the next few years, he added.

Going forward, the company can expand beyond the 750 cities it currently does food delivery in, he said, adding the food delivery segment has a long runway for growth. Blinkit too is “very small” and is expected to keep growing at 60-70% year on year, he said.