Equity Research INDIA

October 15, 2022

BSE Sensex: 57920
Zomato HOLD
ICICI Securities Limited
is the author and
distributor of this report May not be out of the woods yet… Rs62
We reinitiate coverage on Zomato with a HOLD rating and target price of Rs65. We
Re-initiating coverage think the management’s guidance toward attaining EBITDA-breakeven for the
Zomato business by Q1FY24 would require careful calibration of employee
expenses and marketing spends. We estimate EBITDA margin of -1.3% for FY24E.
Internet The Hyperpure business (B2B e-commerce vertical of Zomato) is likely to benefit
from growth in the overall segment. However, scale-up of Hyperpure will be
contingent on significant investments in building refrigerated supply-chains and
Target price: Rs65 technology for tagging and batching of fresh farm produce. We assign a HOLD
rating on the stock given the uncertainties around integration of Blinkit (its quick-
commerce vertical) and its impact on profitability.
Shareholding pattern
Dec Mar Jun  Hyperpure business could grow faster than expected. We have created a
'21 '22 '22 proprietary model to assess the total addressable market (TAM) size and revenue
Promoters 0.0 0.0 0.0
Institutional opportunity for the B2B e-commerce segment in India. TAM for the B2B e-commerce
investors 15.7 13.5 12.6 segment as of FY23E is ~US$25bn by our estimates and this is likely to grow very
MFs and others 3.9 2.8 2.4
Banks & Fis 0.2 0.1 0.1 rapidly on the back of increasing digital penetration. Digital penetration in India B2B
Insurance Cos. 0.4 0.1 0.2 e-commerce is likely to reach ~1.2% by the end of FY23E compared to 13% (2019)
FIIs 11.2 10.5 9.9
Others 84.3 86.5 87.4 in US (link). We believe B2B e-commerce is poised for a CAGR of ~55.8% over
Source: BSE FY23-FY25E. Zomato’s Hyperpure business could benefit from this trend, especially
given its existing commercial relationships with ~208k restaurants across the country
and synergistic sourcing opportunities with Blinkit. (Link to our detail report)
 Underlying metrics of the food delivery business show steady improvement.
We believe underlying metrics have improved. We estimate: 1) ordering frequency
per user per month to have increased from 3.0 to 3.2; 2) delivery fees charged per
order has increased from Rs22.43 to Rs24.76; and 3) take-rate from restaurants (ex-
delivery fees) has increased from 17.1% to 17.7% -- from Q3FY22 to Q1FY23. This,
in our view, has resulted in the food delivery business’s contribution as a % of gross
order value (GOV-reported) improving from 1.1% to 2.8% during the same period.
Consequently, Zomato reported EBITDA breakeven in Q1FY23 for the food delivery
business. While all of these are positive developments, we think the stock is likely to
remain range-bound given the uncertainties around path to profitability for Blinkit.
 Risk: Reward still not compelling enough. The stock has corrected ~55% in the
past 1 year, which has meant a significant derating. However, we note the stock is
still trading at a premium to most of its global peers (~7x CY22E EV/Sales vs ~4.2x
global average). We re-initiate with a HOLD rating on the stock given the
uncertainties around integration of Blinkit (its quick-commerce vertical) and its
impact on profitability. We arrive at a DCF based target price of Rs65 on the basis of
WACC 12.5% and terminal growth 5% assumptions. At current valuations, we
believe risk reward is evenly balanced (1.3:1).
Market Cap Rs560bn/US$6.8bn Year to Mar FY22 FY23E FY24E FY25E
Research Analysts: Bloomberg ZOMATO IN Revenue (Rs mn) 41,924 64,983 86,718 1,14,273
Shares Outstanding (mn) 8548.7 EBITDA(Rs mn) (18,508) (13,452) (4,431) 1,659
Abhisek Banerjee
Abhisek.banerjee@icicisecurities.com 52-week Range (Rs) 160/42 Net Income (Rs mn) (12,087) (11,261) (3,644) 1,585
+91 22 6807 7574 Free Float (%) 100.0 EPS (Rs) (1.7) (1.6) (0.5) 0.2
Manoj Menon FII (%) 9.9 P/E (x) n.a. n.a. n.a. 301.3
manoj.menon@icicisecurities.com
+91 22 6807 7209 Daily Volume (US$'000) 81,613 CEPS (Rs) (1.5) (1.3) (0.3) 0.5
Heenal Gada Absolute Return 3m (%) 16.8 EV/E (x) n.a. n.a. n.a. 254.1
heenal.gada@icicisecurities.com Absolute Return 12m (%) (52.1) Dividend Yield - - - -
+91 22 6807 7504
Sensex Return 3m (%) 5.4 RoCE (%) (16.2) (9.2) (3.8) (0.2)
Sensex Return 12m (%) (3.8) RoE (%) (9.8) (7.1) (2.4) 1.1
Please refer to important disclosures at the end of this report
Zomato, October 15, 2022 ICICI Securities

Revenue drivers
We believe the key revenue drivers for Zomato are likely to be:
1. Improved ordering frequency: We think ordering frequency per month has been
improving over the past 2-3 quarters as people start returning to office. We
estimate ordering frequency per month to have increased from 3.0 to 3.2 over
Q3FY22 to Q1FY23. However, we think average order values (AOVs) have not
fallen from FY22 levels due to price increases taken by restaurants to counter food
inflation and also due to increasing the delivery fees charged per order.
2. Delivery fees improvement: We believe both food delivery platforms (Zomato and
Swiggy) have tried to pass on some of the inflation in fuel prices and personnel costs by
increasing the delivery fees. For Zomato, we estimate delivery fees charged per order
has increased from Rs22.43 to Rs24.76.
3. Improving take-rates: We estimate the take-rate from restaurants (ex-delivery fees)
has increased from 17.1% to 17.7% from Q3FY22 to Q1FY23. Management, during the
Q1FY23 conference call, mentioned this has been done by increasing take-rates of
restaurants at the lower end of the take-rate band.
4. Hyperpure growth acceleration: We estimate a CAGR of ~57.5% over FY23E-
FY25E for B2B e-commerce. The Hyperpure business could benefit from this
trend, especially given its existing commercial relationships with ~208k restaurants
across the country and synergistic sourcing opportunities with its quick-commerce
vertical Blinkit.
Table 1: Key operating metrics
Q3FY22 Q4FY22 Q1FY23
Orders (mn) 138 147 162
AOV (Rs) 398 398 398
Ordering frequency (per month) 3.0 3.1 3.2
Delivery fees (Rs mn) 3,100 3,300 4,000
Delivery fees per order (Rs) 22.4 22.5 24.8
Commissions (visible to restaurant) 17.1% 17.2% 17.7%
Commissions per order 64.4 64.6 66.2
Reported rev gross take rate (including delivery fees) 21.8% 21.9% 22.9%
Reported rev take rate (excluding delivery fees) 16.2% 16.2% 16.6%
Source: Company data, I-Sec research

Chart 1: Increasing proportion of non-delivery food business in overall revenue

24% Non-food delivery business (% of revenues)
22%
22%

20% 19%

18%
18%

16%
14%
14%

12%

10%
FY22 FY23E FY24E FY25E
Source: I-Sec research, Company

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Zomato, October 15, 2022 ICICI Securities

EBITDA margin trajectory

We believe EBITDA margin improvement in the Zomato business is likely to be a
gradual process requiring a careful calibration of employee expenses and marketing
spends. Below is how we see the EBITDA margin movement playing out:

Chart 2: EBITDA margin movement

EBITDA (pre-ESOP) margin walk
10.0%

5.0% 1.0% 4.4%

1.0% 1.0%
-10.5% 0.3%
0.0%
5.5%
-5.0%

8.6%
-10.0%

-5.9%
-15.0% 3.3%

-20.0%
FY23E COGS Employee Delivery Advertisement Payment IT support Outsourced Other FY25E
EBITDA expenses (ex- related and gateway support expenses EBITDA
margins ESOPs) charges promotions charges margins
Source: Company data, I-Sec research

COGS: We expect COGS to increase as the proportion of Hyperpure business

increases. This is likely because Hyperpure is a 10-15% steady-state gross margin
business (on par with retail), which is likely to dilute Zomato’s gross margin profile.

Employee expenses: In the Q1FY23 conference call, management mentioned that

employee expenses (ex-ESOPs) are likely to grow at a CAGR of 15-20%. Given that
we estimate revenue to grow at a CAGR of ~33% over FY23E-FY25E, it is estimated
that employee expenses are likely to decrease as a proportion of revenue.

Delivery-related charges: We estimate the delivery-related charges to reduce

sharply as a proportion of sales primarily due to the increasing proportion of B2B
revenues (Hyperpure), which typically has much higher AOVs and can be fulfilled
using delivery vans with route optimisation. We also expect the delivery costs for food
as a result of efficiency improvement.

Advertising and promotions: This is a somewhat discretionary expense and it is

understandable that it may decline as a proportion of sales, especially given increase
in B2B sales which traditionally require less advertising.

The remaining line items such as payment gateway charges, IT support, outsourced
support and other expenses are all likely to decrease as a proportion of sales (though
marginally) as efficiencies of scale play out.

Table 2: I-Sec vs consensus estimates

(Rs mn) Revenue EBITDA PAT
FY23E FY24E FY25E FY23E FY24E FY25E FY23E FY24E FY25E
I-Sec 64,983 86,718 1,14,273 -13,452 -4,431 1,659 -11,261 -3,644 1,585
Consensus 63,477 88,584 1,14,770 -16,625 -10,208 -1,734 -11,484 -7,041 984
Differential 2% -2% 0% n.a. n.a. n.a. n.a. n.a. 61%
Source: Company data, I-Sec research

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Zomato, October 15, 2022 ICICI Securities
Unit economics in the core food delivery business
Below, we have analysed company data to estimate how unit economics in the core
food business have moved.

Table 3: Improving unit economics in the food delivery business

Unit economics for food delivery business Q3FY22 Q4FY22 Q1FY23
Average order value (1) 398 398 398
Delivery fees (2) 22.4 22.5 24.8
Commissions from restaurant (3) 64.4 64.6 66.2
Restaurant makes (4=1-2-3) 311.2 310.9 307.0
Zomato makes per order pre-discount (5=2+3) 86.8 87.1 91.0
Customer discount per order (6) 16.3 16.4 18.0
Zomato makes post discount (7=5-6) 70.5 70.7 73.0
Delivery costs per order 38.5 35.8 34.2
Marketing spends for food ordering per order 13.7 13.8 14.2
Other expenses for food ordering per order 13.9 14.4 13.5
Contribution calculated per order 4.4 6.8 11.1
Source: Company data, I-Sec research

Uncertainties and concerns

Competitive intensity: We believe competitive intensity in the quick-commerce
business is likely to increase as ‘bb now’ from Big Basket (owned by TATA Digital) and
JioMart Express (owned by RIL) start ramping-up their quick-commerce offerings
further. The balance sheet strength of both these corporates is well known. In fact,
recent news articles suggest Big Basket is planning to raise US$200mn from TATA
Digital to ramp-up quick-commerce offerings. While US$200mn is less than the
US$320mn committed by Zomato on Blinkit, it would accrue to an already functioning
pan-India grocery delivery network operated by Big Basket. Swiggy Instamart, Dunzo
and Zepto also are continuing to invest heavily in the space. Therefore, concerns
regarding Blinkit’s path to profitability are likely to remain in the medium term at least.

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Zomato, October 15, 2022 ICICI Securities

Key investor questions and management

commentary
We have analysed the conference call transcripts over the past 3 quarters to identify
key investor questions and management responses to them.

What proportion of incremental customer acquisition is organic? Further, what

is the impact on the overall CAC and A&P spending going forward?
 Since Zomato already has a thriving dining-out and listings business in India, a
large portion of the new users in the food delivery business were actually organic.
That percentage has increased over time as the brand has become much wider in
the country. More than 50% of the new users every quarter are still organic, which
means CAC is lower as compared to other platforms, who are standalone food
delivery players, or who don't have the legacy as a brand or a business. And this
continues to trend downward YoY which makes the economics going forward
healthier.
Company wants to focus on reduction in losses as well as accelerated growth.
Is it easy to balance the two at this point of time given that, for incremental
customers Zomato still needs to have subsidies?
 In this business, losses reduce because of growth, because when the segment of
the customer base which is profitable starts to grow, the overall contribution in
dollars starts to swell. Hence, as the company grows faster, it becomes easier to
reduce losses because operating leverages, and the benefit of economies of scale
in the business, kick-in. Further, in the past couple of quarters, business has
grown sequentially while losses have reduced, and the same trend is expected to
continue.
 In terms of subsidies, in FY18-19, it was largely about acquiring more users every
month, which were new to the category. Zomato had to spend money on acquiring
them and then also make sure that it incentivises them to make a repeat order on
the platform and create that habit and ecosystem. Today, with more than 90% of
business in a month coming from repeat users, management does not expect to
spend money on subsidies. Company believes most of the growth over the next
couple of years will come from repeat frequency going up, rather than getting a lot
of new customers on to the platform.
Thoughts on Blinkit
 Zomato is approaching the online grocery space differently wherein the distribution
model is not based on centralised warehouses, but local micro-dark stores.
Company is using its existing capabilities on the Hyperlocal delivery side to be
able to deliver some of these products to customers within a few minutes. More
importantly, the online penetration in grocery is so small in the country, that it is
not about taking away share from existing competition. There is so much room to
grow in terms of penetration. So, the market is very, very large and it is too early to
worry about competition here.
 The guiding principle is that management wants to be efficient with their capital as
they believe that the existing business leads the way to build a much larger
business, which will also create a much more defensible business in the long term.

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Zomato, October 15, 2022 ICICI Securities
How will you make money in the medium term, given the kind of competition
plus the neighbourhood / kirana stores, which is a very efficient system in
India?
 Management believes there is a market, and this is a model which actually is more
efficient than the kirana model and that's why it will work, because reliably
delivering groceries or a few other products in minutes is not something which
even kirana stores offer in India. So, while they are efficient, they have lean cost
structures, but the consistency of service is what the company is aiming for. That's
the only scenario under which it will grow, and management is confident for it to
play out. The idea is that as long as Zomato is paying a fair value for what the
customer is buying, business will grow.
In terms of the dining-out business, from a longer-term perspective, how do you
see scale up in this business?
 Management could not share more details and asked to wait for the new product
within this business. Management stated that that this has been a business which
used to feed some of the losses in food delivery a few years ago and they know
how to build this business better. Context has changed in the last 2-3 years and
hence they think this side of the product needs a rethink.
What is the path to profitability for Zomato? How long will it take for the Zomato
business to get to operating breakeven and then making profits?
 The company achieved adjusted EBITDA breakeven in the food delivery business
and the next milestone is to get the overall Zomato business to adjusted EBITDA
breakeven – and management believes they are close to this milestone. Internally,
they are aiming to achieve it by Q4FY23 or by not later than Q2FY24.
What is the view and outlook on the path to profitability and the investments
required to get there on Blinkit and quick-commerce?
 Management had given a guidance/budget of US$400mn investment in Blinkit for
the next couple of years. The business has surpassed expectations in terms of
growth and loss reduction, hence the management has reduced its budget to
US$320mn. It expects to reach breakeven with an investment of US$320mn
starting Jan’22, of which US$150mn has already been invested. Company still
does not have visibility on the timeline for Blinkit.
What are the kind of margins Hyperpure can achieve in the near-to-medium
term?
 Management expects 5-10% EBITDA margins in this business in a steady state.

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Zomato, October 15, 2022 ICICI Securities

Valuation context
The stock has corrected ~55% in the past 1 year, which has meant a significant
derating. However, we note the stock is still trading at a premium to most of its global
peers(~7x CY22E EV/Sales vs ~4.2x global average). We re-initiate with a HOLD
rating on the stock given the uncertainties around integration of Blinkit (its quick-
commerce vertical) and its impact on profitability as well as persisting questions
around governance. We arrive at a DCF based target price of Rs65 on the basis of
WACC 12.5% and terminal growth 5% assumptions.
Chart 3: Zomato EV/Sales band chart
EV/Sales 1SD -1SD Avg 2SD -2SD
30

25

20

15

10

0
Nov-21

Dec-21

Mar-22

Jul-22
Aug-21

Sep-21

Aug-22

Sep-22
Jan-22

Feb-22

Jun-22

Oct-22
Oct-21

Apr-22

May-22
Source: I-Sec research, Bloomberg data
Table 4: Comparison with global companies
EV/Revenue EV/EBITDA P/E
Company name
CY22 CY23 CY24 CY22 CY23 CY24 CY22 CY23 CY24
Doordash 2.6 2.1 1.8 72.1 42.8 26.0 3,785.0 129.2 39.9
Meituan 4.2 3.2 2.6 471.9 51.8 26.7 90.6 38.5
Grab 5.1 3.3 2.4
Restaurant Brands 5.9 5.6 5.4 16.1 15.1 14.3 17.7 16.6 14.8
Domino’s Pizza 3.7 3.4 3.2 19.3 17.6 16.3 25.7 21.8 19.2
Jubilant Foodworks 7.9 6.7 5.7 31.4 26.4 22.6 72.6 56.3 47.9
Deliveroo 0.3 0.2 0.2 13.3
Zomato 7.0 5.2 3.9 n.a. n.a. 269.5 n.a. n.a. 301.3

Revenue growth EBITDA growth EPS growth

Company name
CY22 CY23 CY24 CY22 CY23 CY24 CY22 CY23 CY24
Doordash 30.2 23.0 19.8 -226.3 62.3 82.0 -101.0 2,828.6 223.7
Meituan 23.9 30.8 24.5 -114.2 796.3 88.9 -440.7 135.2
Grab 90.0 54.9 34.6 -18.8 -40.2 -71.5 -55.8 -28.3 -44.0
Restaurant Brands 12.1 5.2 4.2 39.9 5.7 6.6 11.9 6.3 12.4
Domino’s Pizza 5.5 6.6 6.1 -4.6 9.8 8.8 -8.1 17.8 13.8
Jubilant Foodworks 21.8 18.4 16.6 21.4 19.1 16.7 33.9 29.0 17.4
Deliveroo 11.5 14.3 14.0 -52.7 -49.9 -189.4 -35.0 -28.2 -63.1
Zomato 55.0 33.4 31.8 n.a. n.a. n.a. n.a. n.a. n.a.
Source: I-Sec research, Bloomberg data
Table 5: DCF valuation
WACC 12.5%
Terminal growth 5%
NPV of Cash flows (FY23-FY41) 1,78,605
Terminal Value 2,13,166
Enterprise value core business 3,91,771
Enterprise value Blinkit (deal) 44,470
Cash (FY23E) 29,713
Total 4,65,954
Shares 7,238
Value per share (Rs) 65
Source: I-Sec research

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Zomato, October 15, 2022 ICICI Securities

Upside/Downside skew
We believe, the stock at current valuations has an evenly balanced risk-reward ratio of
1.3:1, which is key to our HOLD rating.

Chart 4: Zomato upside/downside chart

Zomato upside downside price chart (Rs) Upside : Downside
1.3 : 1
180
160
140
120
100 90
80 62
60 65
40
40
20
-
Dec-21

Dec-22
Aug-21

Aug-22

Aug-23
Feb-22

Feb-23

Jun-23
Jun-22
Oct-21

Apr-22

Oct-22

Apr-23

Oct-23
Source: I-Sec research, Bloomberg data

Upside (Rs90): The upside scenario prices-in a global macro-economic recovery

aiding faster-than-expected revenue growth (65% YoY) in FY23E. This would be
driven by rapid increase in AOV led by higher delivery fees and take-rate, which would
help Zomato business achieve EBITDA breakeven by Q4FY23E.

Base case (Rs65): The base case prices-in a challenging global macro-environment
as seen over the past 2 quarters. We estimate ~55% YoY revenue growth in FY23E
with gradual sequential EBITDA margin improvement from Q2FY23E onwards and
EBITDA breakeven by Q2/Q3 FY24E (Zomato business).

Downside (Rs40): The downside scenario prices-in further worsening of the global
macro-economic environment leading to material derating of equity markets. It prices-
in a modest revenue growth (35% YoY) in FY23E and EBITDA breakeven (Zomato
business) gets delayed to Q1/Q2FY25E.

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Zomato, October 15, 2022 ICICI Securities

Other key operating metrics

Chart 5: Revenue proportion across businesses Chart 6: Steady increase in gross order value
Revenue share (%) 72 GOV (Rs bn)
64.3
Others, 4% 58.5
Hyperpure, 62
15% 54.1 55.0
52
45.4
42
33.1
32

22

12
Food
delivery, 2
81% Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23

Source: Company data, I-Sec research Source: Company data, I-Sec research

Chart 7: Adj. EBITDA breakeven achieved Chart 8: Steady increase in contribution (%)
Adjusted EBITDA as % of GOV 0.0% Contribution as % of GOV
0% 4.5% 4.1%
4.0%
-1%
3.5%
-0.7% -0.7% 3.0% 2.8% 2.8%
-1%
2.5%
-2% -1.3%
2.0% 1.7%

-2% 1.5% 1.2% 1.1%

-2.2% 1.0%
-3%
0.5%
-2.7% 0.0%
-3%
Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23
Source: Company data, I-Sec research Source: Company data, I-Sec research

Chart 9: MTU has been increasing

18 Avg. m onthly transacting customers (mn)
16.7
15.5 15.3 15.7
16

14
12.3
12
9.8
10

2
Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23
Source: Company data, I-Sec research

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Zomato, October 15, 2022 ICICI Securities

Chart 10: Increasing restaurant partners… Chart 11: … along with delivery partners
Avg. m onthly delivery restaurant partners (k) 350 Avg. m onthly active delivery partners (k)
250 316 319
301 296
205 208 300
200 191
173
250 228
151
142
150 200
164
150
100
100
50
50

0 0
Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23

Source: Company data, I-Sec research Source: Company data, I-Sec research

Chart 12: Sharp increase in orders in FY22 Chart 13: AOV remained largely stable
Orders (mn) 452 AOV (Rs)
600
535 397 398
402
500
352
403
400 302 282 278

252
300
239 202
191
200 152

102
100
52
0 2
FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22
Source: Company data, I-Sec research Source: Company data, I-Sec research

Chart 14: Expect steady increase ahead… Chart 15: … as consumer penetration increases
500 455 7.0% 1,200 1,087 3.7
450 3.6
6.0% 1,000
400 369 900 3.6 3.5
6.1%
350 5.0% 741 3.4
295 800
300 4.9% 3.4 3.3
4.0%
250 600 535 3.2
213
200 3.0% 3.2 3.1
3.4%
400
150 2.0% 3.0
3.0
100 2.9
200
1.7% 1.0% 2.8
50
- 0.0% - 2.7
FY22 FY23E FY24E FY25E FY22 FY23E FY24E FY25E

GOV (Rs bn) Contribution as % of GOV No. of orders (mn) Avg. monthly transacting customers

Source: Company data, I-Sec research Source: Company data, I-Sec research.

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Zomato, October 15, 2022 ICICI Securities

Financial summary (consolidated)

Table 6: Profit and Loss statement
(Rs mn, year ending Mar 31)
FY22 FY23E FY24E FY25E
Operating Revenues (Sales) 41,924 64,983 86,718 1,14,273
Operating Expenses 60,432 78,435 91,149 1,12,614
EBITDA pre ESOP cost (9,729) (6,803) (1,107) 4,983
% margins (23.2) (10.5) (1.3) 4.4
ESOP costs 8,779 6,649 3,324 3,324
EBITDA (18,508) (13,452) (4,431) 1,659
% margins (44.1) (20.7) (5.1) 1.5
Depreciation & Amortisation 1,503 1,625 1,821 2,171
EBIT (20,011) (15,077) (6,252) (512)
% margins (47.7) (23.2) (7.2) (0.4)
Other Income 4,949 3,987 2,805 2,848
Recurring Profit / (Loss) (15,061) (11,261) (3,644) 1,585
Exceptional items 2,974 - - -
Reported Net Profit/(Loss) (12,087) (11,261) (3,644) 1,585
Source: Company data, I-Sec research

Table 7: Balance sheet

(Rs mn, year ending March) FY22 FY23E FY24E FY25E
Assets
Total Current Assets 75,450 76,546 80,942 91,632
Total Current Liabilities & Provisions 7,115 10,984 14,497 18,951
Net Current Assets 68,335 65,562 66,444 72,680

Net Fixed Assets 14,049 13,334 12,727 12,156

Long-term loans and advances - - - -
Other Long Term Assets 83,101 83,101 83,101 83,101
Deferred tax assets (net) 670 670 670 670
Total Assets 1,66,155 1,62,667 1,62,943 1,68,607

Liabilities
Long term provisions 653 890 1,188 1,565
Other Long Term Liabilities 513 8,049 11,671 15,372
Equity Share Capital 7,643 7,643 7,643 7,643
Reserves & Surplus 1,57,346 1,46,085 1,42,441 1,44,026
Net Worth 1,64,989 1,53,728 1,50,084 1,51,669
Total Liabilities 1,66,155 1,62,667 1,62,943 1,68,607
Source: Company data, I-Sec research

Table 8: Cashflow statement

(Rs mn, year ending Mar 31)
FY22 FY23E FY24E FY25E
Operating Cashflow before W Cap changes (9,221) (6,803) (1,107) 4,983
Working Capital Inflow / (Outflow) 2,291 1,538 777 333
Capex (590) (910) (1,214) (1,600)
Free Cashflow (7,520) (6,175) (1,543) 3,716
Cashflow from other Invst Act (Ex Capex) (78,788) 3,987 2,805 2,848
Proceeds from Issue of Share Capital 90,000 - (0) (0)
Inc/(Dec) in Borrowings / Deferred Liabilities (2,495) - - -
Interest & Dividend paid (7) (172) (198) (222)
Increase/(Decrease) in Cash 1,190 (2,359) 1,064 6,342
Source: Company data, I-Sec research

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Zomato, October 15, 2022 ICICI Securities
Table 9: Key ratios
(Year ending Mar 31)
(Rs mn, year ending March) FY22 FY23E FY24E FY25E
Per Share Data (Rs)
Earnings per share (Diluted Reported) (1.7) (1.6) (0.5) 0.2
Earnings per share (Basic Reported) (1.7) (1.6) (0.5) 0.2
Cash earnings per share (1.5) (1.3) (0.3) 0.5
Dividend per share - - - -
Book Value per share 22.8 21.2 20.7 21.0

Growth Ratios (%)

Operating Income (Sales) 110.3 55.0 33.4 31.8
EBITDA 296.2 (27.3) (67.1) (137.4)
Recurring Net Income 208.6 (25.2) (67.6) (143.5)
Diluted EPS 10.6 (6.8) (67.6) (143.5)
Diluted CEPS 16.6 (9.0) (81.1) (306.1)

Valuation Ratios (x)

P/E n.a. n.a. n.a. 301.3
P/CEPS n.a. n.a. n.a. 127.2
P/BV 2.9 3.1 3.2 3.1
EV / EBITDA n.a. n.a. n.a. 254.1
EV / Sales 10.2 6.6 4.9 3.7
EV / FCF n.a. n.a. n.a. 113.4

Operating Ratios
Other Income / PBT (%) (32.6) (35.4) (77.0) 134.7
Effective Tax Rate (%) (0.1) - - 25.0
Fixed Asset Turnover (x) on average 0.5 0.2 0.2 0.1
Receivables (days) 13.9 20.0 20.0 20.0
Payables (days) 37.3 38.0 38.0 38.0
D/E Ratio (x) - - - -

Return/Profitability Ratios (%)

Recurring Net Income Margins (35.9) (17.3) (4.2) 1.4
RoCE (Based on Avg) (16.2) (9.2) (3.8) (0.2)
RoNW (Based on Avg) (9.8) (7.1) (2.4) 1.1
Dividend Payout Ratio - - - -
Dividend Yield - - - -
EBITDA Margin (44.1) (20.7) (5.1) 1.5
Source: Company data, I-Sec research

Price chart
180
160
140
120
100
(Rs)

80
60
40
20
0
May-22
Jan-22
Jan-22

Jun-22
Jun-22
Feb-22
Mar-22
Oct-21

Apr-22
Apr-22

Oct-22
Jul-21

Jul-22
Sep-21
Sep-21

Nov-21
Nov-21
Dec-21

Aug-22
Aug-22
Sep-22
Aug-21

Source: Bloomberg

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Zomato, October 15, 2022 ICICI Securities
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