Zomato losses soar in FY16, drag parent Info Edge into the red
Restaurant listings and discovery company Zomato Media Pvt Ltd plunged deeper into the red in the financial year through March 2016 and even pushed parent Info Edge (India) Ltd into losses.
Pre-tax loss at Zomato widened almost four-fold to Rs 492.27 crore in 2015-16 from Rs 136 crore the year before. Revenue doubled to Rs 184.96 crore from Rs 96.73 crore, according to Mumbai-listed Info Edge's regulatory filings.
Info Edge, which holds a 50.1% stake in Zomato, said the company posted a consolidated net loss of Rs 251.79 crore for 2015-16 compared with a net profit of Rs 24.1 crore the year before. Consolidated net sales rose 28% to Rs 938.2 crore from Rs 732.5 crore.
On a standalone basis, Info Edge posted a net profit of Rs 141.58 crore for 2015-16 compared with Rs 193.86 crore the year before. For the fourth quarter through March, the company's standalone net profit fell 30% from a year earlier to Rs 57.18 crore while net sales rose 18% to Rs 204 crore.
Info Edge operates a slew of internet properties including recruitment site Naukri.com, real estate portal 99acres.com and matrimonial website Jeevansathi.com. It also runs education services portal Shiksha.com.
Zomato's pain Gurgaon-based Zomato was founded in 2008 by IIT Delhi alumni and ex-Bain employees Deepinder Goyal and Pankaj Chaddah. Its losses have multiplied over the years as it expanded rapidly. Its pre-tax loss tripled in 2014-15 and quadrupled the year before while revenue grew at a similar pace.
The company became one of the few so-called unicorns, or privately held firms valued at least $1 billion, in India when it raised $60 million in fresh funding from Singapore government's investment company Temasek and existing investor Vy Capital in September 2015. It had earlier raised $50 million in April last year, led by Info Edge.
However, earlier this month, the brokerage arm of HSBC—which initiated coverage on Info Edge—cut its valuation of the restaurant listing site by half to $500 million. Zomato, however, dismissed the HSBC report. Co-founder and CEO Deepinder Goyal wrote in an internal mail to employees that the company's existing investors were "bullish about us, and are willing to back us further, if needed".
Naukri, other businesses Info Edge's recruitment solutions business, which includes Naukri and associated sites, registered 15% sequential growth in net sales to Rs 148.88 crore for the fourth quarter from Rs 129.36 crore in the previous three months. Pre-tax profit increased to Rs 78.19 crore from Rs 64.14 crore in the third quarter.
Other businesses including Shiksha and Jeevansathi posted a loss of Rs 85.3 lakh on revenue of Rs 23.64 crore for the fourth quarter.
The company's advertisement and promotion spends dropped 20% sequentially in the fourth quarter with advertisement costs contributing 14% to total expenditure. Its employee expenses jumped 30% from a year earlier to Rs 89 crore.
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