On Thursday, the world witnessed a stellar cricket match. India defeated Sri Lanka by a record 302 runs in the ongoing World Cup. The following day, however, D-Street was abuzz with a different name: Zomato.

The company’s stock hit a 52-week high of Rs 120 on the BSE, the first time it has crossed its listing price of Rs 115 since January.

And no, it wasn’t on account of the flurry of food delivery orders by people who watched the short yet thrilling match, but because Zomato had reported a second consecutive profitable quarter for 2023-24.

A look at the numbers: In the quarter ended September, the company’s revenue from operations saw a 71% year-on-year jump and 18% sequential rise to Rs 2,848 crore. Zomato also clocked a net profit of Rs 36 crore in the July-September period. In the same quarter, a year ago, it had recorded a loss of Rs 251 crore.

The 13-year old Gurugram-based company turned profitable for the first time only in the April-June quarter of this year—with a modest profit after tax of Rs 2 crore.

Remember that while Zomato’s net profit saw a significant jump, sequentially, a deferred tax adjustment of Rs 16 crore pushed this bottomline performance. This is also what happened in the June quarter when the deferred tax adjustment turned the bottom line and optics positive, as profit before tax was at a negative Rs 15 crore.

Its consolidated gross order value—the total value of the orders placed on a platform—grew 47% year-on-year to Rs 11,422 crore. Excluding the quick commerce arm, Blinkit, the online food aggregator’s GOV grew 25% year-on-year.

In the quarterly results, the spotlight was on Zomato’s customer loyalty programme: Zomato Gold. The Deepinder Goyal-led company claimed that Zomato Gold has garnered 3.8 million members since its introduction in January. According to the company, Gold members are driving Zomato’s food delivery business, with these orders contributing to nearly 40% of the segment’s GOV. But, interestingly, Zomato also said that the service continues to remain less profitable on a per-order basis due to longer average delivery times and distances, which increase costs.

Slowdown in growth? However, while it looks like all of Zomato’s verticals are scaling, growth in revenue and gross order values seem to have slowed down.

Revenue from the food delivery business grew 21.7% year-on-year to Rs 1,925 crore in the September quarter, owing to high base effects and need to maintain margins. Sequentially, it was up 10.5%. In the June quarter, the food delivery arm had recorded an 18.5% year-on-year growth in revenue. In contrast, growth rates in FY22 averaged about 80%.

Meanwhile, GOV from Zomato’s food delivery business in the current quarter grew 20% year-on-year but merely 9% sequentially. The average order value remained “largely flat”.

Note that profitability in the food delivery business was also driven by trimming costs and lowering benefits. This sort of demonstrates what we had said before: Zomato can either grow or it can be profitable, not both. (For more context, read: Zomato doesn’t look like a growth stock.)

Other segments: The business’ B2B supply arm Hyperpure’s revenue jumped 123% year-on-year to Rs 745 crore in the September quarter. Additionally, Zomato’s going-out business—which includes dining out and events—recorded Rs 49 crore in revenue, up 88% year-on-year. This was the first time the company reported results for its going-out arm.

Interestingly, Blinkit’s contribution to the revenue turned from a negative Rs 14 crore in the June quarter to Rs 36 crore in the September quarter. But its adjusted EBITDA loss at Rs 125 crore remained largely flat from the previous quarter, underscoring the fact that operating expenses are sticky and profitability is far away for this loss-making arm.

However, the company remains optimistic about the quick commerce business as the gross order value saw a rise: “Quick commerce bounced back with a 29% QoQ GOV growth following tepid growth in Q1FY24 [the quarter ended June] (due to temporary disruptions in the business).

These “temporary disruptions” refer to Blinkit’s delivery partners going on strike against a revised payout system, which would essentially mean lower earnings for these executives. For more on this, read this, this and this.

Zomato CEO Deepinder Goyal also remained bullish on Blinkit: “We are now seeing profitable economics not just at a store level but also at a city level—where some of our cities are now operating at similar Contribution per order as the food delivery business in those cities. So even from a potential profit pool perspective, we think quick commerce is a larger opportunity than food delivery.”

Overall outlook: While the order volume is generally hit in the September quarter due to lower delivery partner availability amid the monsoons, Zomato said this year, the company was able to “improve on that through better all-round execution.”

For the upcoming quarter (October-December), the company remains cautiously optimistic as it believes that the festive season could be a “mixed bag”. On World Cup matches, like those mentioned at the beginning, driving up orders, Zomato noted that while it could bring in more orders, the “uptick would be limited to a handful of match days” and would not significantly impact order volumes in the next quarterly results.