Academic Research Project- Not a Recommendation

Equity Research Report

Zomato Ltd.
Break-even during FY25!
Recommendation: XXX
CMP: 110
About the Company
Target Price: XXX
Zomato (the erstwhile Foodlet/Foodiebay) began its journey in the year 2008
as a restaurant discovery, review and ratings platforms for tech-savvy Stock Data (as on oct 12,2023)
consumers seeking dining out options in their neighbourhoods. Over the next
NIFTY :19,794
few years, the company focused on expanding its restaurant discovery and
search business in several international markets through organic as well as 52 Weeks H/L(INR) :113.25/44.35
inorganic means. In 2015, as part of a strategic move the company entered Market Cap(INR Cr) :94,433
the budding but highly competitive online food delivery services vertical, Outstanding shares(Cr) :860.44
while simultaneously continuing to invest in its core discovery platform
Dividend yield(%) :0.00%
business. The investments from Ant Group in 2018 were one of the most
defining moments for the company, as they led to a massive ramp-up in its NSE Code :ZOMATO
food delivery operations over the next 2-3 years (until Covid-19 impact
Relative Stock Performance-1Y
derailed the momentum). With competition falling apart due to funds
squeeze, massive cash burn or inability to scale-up beyond a few cities, NIFTY ZOMATO
Zomato managed to consolidate its position and ultimately became a market
leader in the food delivery services vertical following its merger with Uber
Eats India (in Jan’20). While the company was on an expansion spree in food
delivery, it also continued to experiment with adjacent services, couple of
which that can be termed fairly successful include the premium membership
programme (Zomato Gold/Pro) and B2B supplies business (Hyperpure). In 2 2 3 3 3 3
t-2 ec-2 eb-2 pr-2 un-2 ug-2
Jun’21, the company announced a financial investment of ~USD 100mn in Oc D F A J A
Grofers, a leading player in India’s grocery delivery space that would
effectively give it a foothold in the USD 3.7bn market as of FY21. Earlier in
Jan’21, the company had acquired ~65% stake in Fitso, a fitness focused
Absolute Returns
business that can drive Zomato’s growth in healthy foods and snacks. 1 Year :12.6%
3 Years :10.2%
In its online food delivery vertical, the company primarily earns revenues in
the form of commissions (as a percentage of total order value) for each 5 Years :56.1%
successful order that the partner restaurants receive through Zomato’s
Shareholding Pattern (as on Jun 2023)
platform. While a majority of restaurant listings on the company’s food
delivery as well as dining-out platform are free (freemium business model), FIIs :54.43%
some restaurant partners pay advertising fees either for running their DIIs :9.93%
advertisement campaigns or for helping them generate traffic on their Public :33.56%
storefronts (on a pay per click basis). The Company also earns subscription
Others :2.09%
revenues through its premium membership Zomato Pro (a customer loyalty
programme that offers flat discounts to consumers at select restaurant Financial Summary
partners for both online food delivery as well as dining-out services). Lastly,
the company earns trading revenues by supplying restaurant partner’s In INR Cr FY23 FY24E FY25E
fresh, high quality food ingredients and other supplies that it sources directly Net Revenue 7,079 9244.45 15,677
from farmers, mills, producers and processors. Going ahead, Zomato also
intends to charge platform fees to its food delivery partners. The food YOY Growth % 69% 31% 70%
delivery vertical remains the mainstay business for Zomato. In FY21, the EBITDA -1,211 -2,247 1,034
company earned three-fourth of its total revenues from this vertical despite
EBITDA Margins (%) -17% 86% 54%
it bearing significant impact of the Covid-19 crisis. The Company is also
rapidly scaling up its two-year old venture ‘Hyperpure’ and it now accounts PAT -971 -236.15 828
for ~10% of the company’s total revenues. On the other hand, dining-out
YOY Growth % -21% -76% -179%
which accounts for 15% of the company’s revenues is likely to get impacted
in the near term by the company’s decision to shut down operations in ROE -5.40% 0% 4%
several international markets (company had international operations in 23 EPS (in INR) -1.1 0.00 1.00
countries as of 31 Mar’21). Zomato is poised to leverage the decadal growth
opportunity in India’s on-demand hyperlocal delivery ecosystem. We EV/EBITDA -35.61 x 581.15 x 77.80 x
advocate a) scale and b) penetration in India’s online segment should be
the key metrics that the company should be evaluated on in the near term,
given the huge opportunity size. Robust industry tailwinds such as improving
tech penetration. Prepared by: Saswata Dey
Source: Multiple reports, Company Analysis. Guided by: Parth Verma (The Valuation School)
Academic Research Project- Not a Recommendation

Zomato Ltd.
Zomato - due to its strong balance sheet, presence across the value chain
and favourable industry tailwinds - can be a major beneficiary. The industry
structure is likely to remain a duopoly of Zomato and Swiggy with limited
disruptions from the weaker offering propositions from direct ordering Online Food Delivery Market (USD
companies like DotPe Thrive and ONDC, etc due to limited networks in Indian Billions):
cities. Coupled with the moats of network effects, branding, last-mile 8.8
delivery, customer user behaviour (convenience and addiction) and wide 7.2
geographical reach, we believe that the duopoly is likely to dominate in the 6.2
visible future. 5.1

Brief overview 3.2

2.3
Food services in India is slated to be a USD 110bn opportunity by CY25
(Redseer estimates). The company to deliver GOV/Revenue CAGR of 48%
over FY21-26 in its flagship food delivery business. We also expect a strong FY20 FY21 FY22 FY23 FY24 FY25
ramp-up in the Hyperpure business (revenue CAGR of 59%) but note that the Source: MOFSL, Company
decision to shut international market operations would negatively impact
dining-out business in the near term. Overall 46% revenue growth at the
group level for Revenue CAGR (FY23-25E)

Zomato over the next five years and rising number of digitally native
millennials/GenZ within the income share are likely to support the
company’s growth ambitions. Expansion of the Hyperpure vertical to have a 23%
36%
positive influence on the flagship delivery business. We forecast CAGR of
48%/46% for Zomato in Food GOV/ Group revenue terms over FY21-26,
while factoring in operational profitability only in FY25 (mainly driven by 27%
economies of scale). India’s online food delivery market (pre-pandemic)
stood at USD 4.2 bn, with an estimated 45-55 mn online food delivery users
representing ~9% of the total 700 mn internet subscribers. This user data,
Food delivery Blinkit Hyperpure
when compared with the US (90-120 mn food delivery users, 36% of the
internet subscribers) and China (430-470 mn food delivery users, 50% of the
internet subscribers) represents a huge latent opportunity. Triggers for this
rapid growth are rapid urbanization with increasing nuclear families and a
busy lifestyle with both husband & wife being part of the working Contribution Margin (% of GOV)
population. Over the period FY23-26, ZOMATO’s revenue to grow at a CAGR
5.1 5.6
of 41.9% to INR 20,215.5 cr by FY26, driven by 31.7% CAGR growth in food 4.8
3.7
delivery revenue to INR 10,632 cr, Hyperpure CAGR of 62.4% to INR 6445.9 cr,
dine-out & subscription CAGR of 13.3% to INR 340 cr and Blinkit’s revenue to 1.7
grow at CAGR of 51.4% to INR 2,797cr.
FY20 FY21 FY22 FY23 FY24E FY25E

-9
Highlights
• Quite a few executives from the senior management team have left the
company recently. The exits (Mr. Mohit Gupta, Mr. Gaurav Gupta and Mr. Share of QSR to food service market (%)
Rahul Ganjoo) were mainly from the food delivery business, and are likely
to put pressure on Mr. Deepinder Goyal, who would now be directly India
looking into food delivery which creates constrains leadership bandwidth
for strategic matters. China
• Zomato has consciously stayed away from building asset-heavy business Brazil
models.
UK
• online food delivery players that hit profitability without sufficient scaling-
up are more prone to disruption compared with those who focus on USA
building scale moats.
• As per Technopak Analysis, the domestic F&G industry is expected to 0 10 20 30 40 50
grow at a CAGR of 5.3% to US$ 681 bn by FY25, whereas the online F&G
business is expected to grow at a CAGR of 57.2% to US$ 27.2 bn by FY25.
Source: Multiple reports
Academic Research Project- Not a Recommendation

Zomato Ltd.
• Increasing adoption of fashion trends in Tier II & III cities ZOMATO sees
huge opportunities in Tier II & III cities. The company has consciously Global GDP Predictions (%)
adopted a strategy of moving into Tier II & III cities.
• Digital penetration is a key driver. 0.0% 2.0% 4.0% 6.0% 8.0%
• Despite the fact that ordering frequency growth for global food delivery
companies historically has increased rapidly over the years, we assume
World
only a marginal increase to 3.05x per month by FY26E. This is because we
believe an increase in order volumes per active user especially from older
cohorts would be partially offset by a substantial rise in the new user base.
Additionally, cultural eating habits also point to a continued bias for home- Advanced Economies
cooked food that is supported by a female labour force participation rate
of only 20%.
• Bain & Company estimates India had 100-110 million online product Emerging Economies
shoppers in FY20; this can grow to 300-350 million by FY25.
• Zomato’s monthly transacting user base for food delivery to gradually
grow to 45 million by FY26 from 10.7 million in FY20.
• Expect the company to benefit from several cost optimisation efforts Euro Area
made during FY21 and accrue incremental benefits from continued
investments in process automation/ machine learning/ artificial
intelligence. US
• The management has guided that it aims to become profitable by 4QFY23
or latest by 2QFY24E.
Japan
Global Economy

The baseline forecast is for global growth to slow from 3.5 percent in 2022
UK
to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical
(2000–19) average of 3.8 percent. Advanced economies are expected to
slow from 2.6 percent in 2022 to 1.5 percent in 2023 and 1.4 percent in
2024 as policy tightening starts to bite. Emerging market and developing China
economies are projected to have a modest decline in growth from 4.1
percent in 2022 to 4.0 percent in both 2023 and 2024. Global inflation is
forecast to decline steadily, from 8.7 percent in 2022 to 6.9 percent in 2023 India
and 5.8 percent in 2024, due to tighter monetary policy aided by lower
international commodity prices. Core inflation is generally projected to
decline more gradually, and inflation is not expected to return to target until
2025 in most cases. 2022A 2023P 2024P
India vs Global GDP Growth (%) Source: IMF WEO

6.80% 6.50% 7.20% 6.30% 6.30% Indian Economy

3.90%
As if the moon was not enough, India is now aiming for the
stars. After the successful launch of Chandraayan-3 on
2018 2019 2020 2021 2022 2023P 2024P August 23, 2023, India has now set its sights on the sun by
launching Aditya-L1, a spacecraft designed to study the solar
-5.80% atmosphere. Only a handful of countries have achieved this
historic feat.
India Global And it is not just in science where India is taking big leaps.
Source: IMF World bank, RBI The Indian economy, according to IMF estimates, will
emerge as the world’s third largest economy by 2027,
India GDP Quaterly Growth - Actual vs Projected hopping over Japan and Germany, as its GDP crosses US$5
Actual Projected trillion dollars. By 2047, India aspires to be a developed
economy.
According to our estimates, India will need at least 6.5%
growth to reach its first milestone in 2027 and about 8%–9%
15.2%
13.5%

growth to reach the second in 2047. The buoyancy in the

economy instills confidence that the country, at least in the
8.4%
8.4%

7.8%
7.7%

short run, will likely achieve these numbers. The pace in the
5.4%
6.0%

4.1%
4.0%

6.3%
6.2%

4.4%
4.6%

6.1%
4.6%

first few years will be critical for a sustained, fast-growth

trajectory in the long run.

Source: Investing.com
Academic Research Project- Not a Recommendation

Zomato Ltd.

Global Food Delivery, Grocery, Dine-out and Quick Global Online Food Delivery Revenue 1.65
commerce Industry projection (in trillion USD$) 1.53
1.39

Zomato has one of the lowest GOV compared to the global peers, as well as 1.21
the lowest AOV. Lower QSR and restaurant delivery are the key reasons why
1.02
take rate for Meituan (a Chinese shopping platform) is among the lowest
0.86
globally, as 33% of its food delivery revenue is generated from restaurant 0.76
deliveries. India’s total food consumption was worth ~USD 607bn in CY20, (Grocery and Meal included)
according to Redseer estimates. However, the share of non-home cooked 0.56
food (or restaurant food) consumption at ~10% remains significantly lower 0.36
than the US (47-50%) and China (42-45%). 0.30
0.24
The total grocery market was valued at ~USD 573bn in GMV terms in CY20
according to Redseer estimates. However, the online penetration was
abysmally low at 0.6% (total online grocery market size in CY20 was USD
3.3bn), compared to 8%, 4% and 6% penetration in the US, the UK and

2022
2017

2018

2019

2020

2021

2023

2024

2025

2026

2027
China, respectively. Driven by Covid-19 tailwinds, the online grocery
delivery market is expected to report a CAGR of ~49% over the next 5 years
Source: Statista Market Insights
to reach USD 24bn by CY25, thus also improving the penetration rate to
~3%.
ZOMATO’s dining-out services were severely and unlike the company’s food
Global Quick commerce Sales (in billions
delivery business, recovery is taking much longer for dining-out services and USD$) 201.3
it has been further impacted negatively by the second wave of the COVID-19 187.2
169.2
pandemic. 147.5
123
Indian Quick Commerce Sales (in millions USD$) 97.89
7617 82.94
53.49
31.65
5859 17.03 22.6

4507
3467
Source: Statista Market Insights
2667
2051
1578
Indian Food Delivery, Grocery, Dine-out
and Quick commerce Industry
While India is a fairly large market in absolute terms, there
2021 2022 2023 2024 2025 2026 2027 is still a dearth of relevant restaurant supply from an
aggregator perspective. Given the nature of the market, a
large share of suppliers is unorganized in nature and offers
low-ticket items that are not suitable for listing on an
aggregator platform. Food services in India is slated to be a
USD 110bn opportunity by CY25 (Redseer estimates).
Indian Online Food Delivery Sales (in billions USD$) Zomato - due to its strong balance sheet, presence across
25 the value chain and favourable industry tailwinds - can be
20.20 a major beneficiary. We expect the company to deliver
20 18.20 GOV/Revenue CAGR of 48% over FY21-26 in its flagship
16.40 food delivery business. We also expect a strong ramp-up in
14.77
15 13.31 the Hyperpure business (revenue CAGR of 59%) but note
11.99 that the decision to shut international market operations
10.8
would negatively impact dining-out business in the near
10
term. Overall, we forecast 46% revenue growth at the
group level for Zomato over the next five years. The overall
5 food delivery market in India stood at ~US$ 10.8 bn in
CY21 (only 3.6% of the global market of US$296.4 bn in
0 CY21) and it is expected to reach ~US$ 20.3 bn by CY27,
2021 2022 2023 2024 2025 2026 2027 registering a CAGR growth of 11.0%, compared to the
global food delivery market growth of 7.8% over the same
period.
Source: Statista Market Insights
Academic Research Project- Not a Recommendation

Zomato Ltd.

The Indian online grocery market stood at INR 367 bn in CY21 and as per McKinsey Research, it is expected to grow at a CAGR of 29.0% to
INR 1,311 bn by CY26. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration.
With six out of 10 Indian citizens yet to make their first online purchase, India has vast reserves of as yet untapped e-commerce potential.
The Indian government has ambitious plans to prevent any one e-commerce platform dominating in the country, which provides a
significant scope for players with innovative ideas and network to expand business in India. , India is experiencing a faster adoption of quick
commerce market than its peers. According to Redseer, India has a quick commerce penetration of 13% v/s 7%/3% in China/EU,
respectively. Quick commerce market, at USD5.5b, is just 1% of the total domestic grocery market at USD620b.

Concall Analysis – Q1FY23 and Q2FY23 Concall Analysis – Q1FY23 and Q2FY23
Revenue and Profitability: New Products and Services:

• Profitability was driven by growth in revenue and
reduction in cost per order.
• The company expects improvement in contribution
from a decrease in delivery cost, an increase in
revenue, and a continued decrease in variable costs.
• The dining-out business is still very small compared to
the overall business and is not expected to change
much even in FY24.
• The Hyperpure business is expected to continue
growing and losses to continue coming down.

• Revenue is recognized net of discounts resulting in • EV partnership announcements are focused on

almost 50% being knocked off due to discounts.
• Employee expenses have come down sequentially due
to reduction in ESOP charge.
Market and Growth:
reducing carbon footprint rather than reducing delivery
costs, but may improve costs in the future.
• The integration with Hyperpure is primarily on
capabilities and the teams are investing in joint
infrastructure at the farm gate.

• Zomato is underpenetrated in the Indian market and is Operations:

bullish on long-term growth.
• Zomato's focus is on scaling up existing cities before
expanding its footprint.
• The market is competitive, but there is room for
everyone to grow as overall penetration is low.
• The focus is on growing in the top 10 cities where the
business model works, rather than expanding to more
cities.
• The contribution of the top 8 cities to the food delivery
business has not changed much and the growth has
been secular across all cities.
Zomato Gold:
• Zomato Gold led to a reduction in monthly transacting
users (MTUs) but drove up frequency for those who
use it.
• The impact of Zomato Gold on contribution margin will
continue to be there as the program scales, but the
company hopes that MTUs will go up from here.
• The uptake of Gold has not impacted the contribution
of the top 8 cities to the business and Gold is live in
almost 50 cities contributing to 75%-80% of the
business.
• Gold revenue is accounted for in the food delivery
business.
• Zomato is cautiously increasing its SKU assortment
while staying within its principles.
• The number of delivery partners may go up or down
depending on seasonality and various other factors, but
the number of log-in hours is growing every quarter.
• Store additions are on track and have been added at
the run rate guided for the year.
• Power customers tend to have slightly higher AOV on
orders compared to other customers.
• The cost of dark store and replenishment has been
stable on a per dark store basis and will not change
significantly, but the throughput will increase, resulting
in a decrease in the cost per order.
Guidance:
• The company believes that the improvement in
profitability is not coming at the cost of growth, as
levers that do not impact customer growth have been
used to improve margins.
• The company expects AOVs to remain flat or even
trend upwards in the next year.
• The impact of disruptions to Blinkit business is
expected to be minimal and the company expects to be
back to 100% level before this disruption.
Academic Research Project- Not a Recommendation
Zomato Ltd.
Concall Analysis – Q1FY23 and Q2FY23
• The AOV fluctuations in the Blinkit business are due to
seasonal factors and as users mature, their AOV and
the number of categories they buy from the platform
keep increasing.
• Treasmy income for this quarter has been high due to
differences in investments impacting cash flows.
• The company's cash flows may fluctuate due to factors
such as coupon payments and premature fixed
deposits, but the accrued income in the P&L will remain
stable.
The impact of IPL on the business
• I think seasonality has more to do with the weather,
school holidays and stuff like that. And this was pretty
clear to us in the year before last, when the IPL actually
got shifted to October quarter, and it was during that
year that we saw that our business in the summer was
still higher despite there being no IPL. So, I think it's fairly
clear to us now that IPL has a very limited impact on our
business. But in general, any cricket match where the
viewership is very high, is where we see some impact on
upside. We are hoping that World Cup will be different,
given it happens once in 4 years, and it's happening in
India this time so we are expecting some upside, but
we'll have to see how it plays out.
AOV (Average Order Value) of Blinkit
• the AOV movement does tend to move with seasons as
well. This quarter's AOV movement that you're seeing,
part of it was also a result of the fact that we were a little
bit supply constrained, but that drove about 25% of the
overall AOV improvement. The rest of it is mostly
seasonal changes, consumption patterns, especially in
the core FMCG and grocery space. And that's what
usually drives up the AOV during some parts of the
month. So, you will see more variability in AOV, not
consistently going up or down, but we take that into our
business projections and how we think about the
business.
Employee Expenses and Delivery Rider Fees:
• I think our employee expenses have come down in the
last 2 quarters. And I think this is largely a function of the
rightsizing that we did in the December quarter. I think
all of that is fully flowing into our P&L now, given that
there were some severance payouts in the previous
quarter.
• I think on that one, we don't have full clarity yet. I think
we're still waiting more clarity there. And I think basis
that we'll be able to ascertain the steps that we need to
take to manage that. But at this point, I think it's a very
Source: Company Analysis
Concall Analysis – Q1FY23 and Q2FY23
broad-based bill, and there are no specific details. So, we’re
just waiting and watching right now.
• The changes that we made in April was to bring all our
delivery partners onto the same kind of payout structure so
that it was more even across the board, and we have not
made any changes beyond that. The overall cost of delivery
for us did not decrease significantly during the quarter. And
because that was not the intent of the changes that we
were making as well. So, the delivery payouts per order to
our delivery partners have remained broadly the same.
Most of the improvement that you're seeing on the
contribution side is coming more from operating leverage
of our fixed assets as well as improving margin profile and
improving average ticket size.
• I think the reference there was largely to the changes that
we did on the people side and some calls we took on
driving growth like on Zomato Gold, where at that time, we
felt that there was a perception that, it will impact the
business in a negative way. So I think largely, that was what
we meant with this. We're not talking about any business
calls here, which investors are not aware of.
Risky Bets and Growth Outlook:
• There has been a 100-basis point QoQ improvement in the
take rates. Non-grocery mix appears to be improving. The
mindset with which we operate is that we are always
looking to bring more convenience with more product
categories for our customers. So, we've been increasing the
size of portfolio available in 10 minutes to our customers
consistently over the last one year, and that is what is
leading to improvement in the overall both the ticket size
as well as the margins for us. And I think we'll continue to
do that into the future as well.
• Growth rate in Blinkit of 60% plus on GOV for the
foreseeable future and overall Adjusted Revenue growth of
40% plus.
Impact of Floods and Disruptions:
• I think all these events do have a hyperlocal impact on our
business. Even, for example, in Gurgaon, we've had some
local issues last few days, and that has impacted our ability
to service some of our customers in a few neighborhoods.
So, I think that impact, as you all mentioned also, was there
in the last couple of months because of untimely heavy
rains. So, we've sort of navigated all of that and that did
have an impact on the growth of the business over the last
couple of months.
Restaurant Count and Zomato Gold:
• I don't think we mentioned that the AOVs were lesser, what
we mentioned was that the MTUs got impacted to some
extent as multiple individual users in the same family were
ordering from the same account. We don't see any major
shift in the position that we saw even earlier. So AOVs are
slightly higher than normal AOVs and the frequency of
ordering, of course, is significantly higher. Part of that could
be because of the clubbing of orders, but part of it is also
genuinely because there are free delivery benefits and
other benefits.
Academic Research Project- Not a Recommendation

Zomato Ltd.

Management Analysis
Professionals
Name Title Background Job Functions
Goyal, Deepinder Co-Founder, MD, CEO & Director Mr. Deepinder Goyal was Independent Director of Chief Executive Officer, Top
UrbanClap Technologies India Private Limited from April Key Executive, Member of the
2022 until March 2023. He is a Co-Founder of Zomato Board of Directors, Member of
Limited since 2008 and serves as its Chief Executive Corporate Governance
Officer since July 2008. He is Managing Director at Committee, Member of Risk
Zomato Limited since March 24, 2021. Mr. Goyal guides Committee, Chairman of Risk
the team at Zomato Media Pvt. Ltd. on overall strategy Committee
ranging from content acquisition, legal issues, competitor
benchmarking, marketing strategy, growth and
sustainability. He serves as Independent Director at
Samast Technologies Private Limited (formerly known as
Samast Technologies Pvt Ltd) (alternate name: magicpin)
since July 2021. Mr. Goyal served as Senior Associate
Consultant at Bain and Company from January 2006 to
November 2009. He was seen on CNBC Young Turks
where, given his BMI. He has been a Director of Zomato
Limited since January 18, 2010. He is also on the boards of
edtech Unacademy. Mr. Goyal holds an Integrated
Master’s in mathematics and Computing from IIT Delhi
from 2000 to 2005.-
Goyal, Akshant Chief Financial Officer Mr. Akshant Goyal has been Chief Financial Officer of Chief Financial Officer
Zomato Limited since November 09, 2020. He joined the
Zomato Limited in April 1, 2017. He was previously the
head of corporate development at the Gurugram-
headquartered online food delivery company. He has
been with Zomato for about four years, has played a
critical role in the company's fundraising efforts. He holds
Master of Business Administration (MBA) from Indian
Institute of Management Bangalore from 2006 to 2008
and Bachelor of Engineering (B.E.), Computer Science
from Delhi College of Engineering from 2001 to 2005. He
worked in different roles with Kotak Mahindra Capital
Company Limited and a fin-tech start up.-
Sawhney, Daminee Head of Human Resources Ms. Daminee Sawhney is Head of Human Resources at Chief Operating Officer, Head
Zomato Limited. She first joined the Company on of Human Resources
February 1, 2011 and was associated till November 11,
2011. She re-joined the Company on December 24, 2012.
She attended a bachelor’s degree course in business
administration from the Amity University and holds a
master’s degree of science in international employment
relations and human resource management from the
London School of Economics and Political Science, United
Kingdom. She has worked with Radisson MBD Hotel.-

Bhalla, Damini General Counsel Ms. Damini Bhalla is General Counsel at Zomato Limited Chief Legal Officer
since March 26, 2021. She joined the Company in March
26, 2021. She graduated with a B.A. B.L. (Honours) degree
from NALSAR University of Law in 2005, Hyderabad and is
a qualified, non-practising solicitor of England and Wales.
She has worked in two law firms, including one law firm
abroad. She was a partner at L&L Partners, New Delhi
(formerly known as Luthra & Luthra Law Offices) in her
last stint.-
Sethia, Sandhya Company Secretary & Compliance Ms. Sandhya Sethia has been Company Secretary at Secretary, Chief Compliance
Officer Zomato Limited since January 21, 2019 and has been its Officer
Compliance Officer. She joined the Company in January
10, 2019. She holds a bachelor’s degree in commerce
(honours) from University of Delhi and is an associate
member of the Institute of Company Secretaries of India.
She has worked for over six years in different roles with
JHS Svendgaard Laboratories Limited, Mideast Integrated
Steels Limited and Affle India Private Limited.-
Source: Company Analysis
 Academic Research Project- Not a Recommendation

Zomato Ltd.

Chopra, Akriti Head of People development Ms. Akriti Chopra serves as Head of People Development at Senior Key Executive, Human
Zomato Limited since November 9, 2020. She joined the Resources Professional
Zomato Limited in November 9, 2011. She attended a
bachelor’s degree course in commerce from Lady Sri Ram
College, Delhi University and is an associate member of the
Institute of Chartered Accountants of India. She was
associated with PricewaterhouseCoopers group through its
network firm Lovelock & Lewes, Chartered Accountants for
three years.-

Das, Surobhi Head of Customer Experience Ms. Surobhi Das is Head of Customer Experience at Zomato Chief Operating Officer, Senior
Limited since August 18, 2020 and previously she served as Key Executive
its Chief Operating Officer since July 2015. She first joined
the Company in July 5, 2011 and was associated till May 12,
2018. She re-joined the Company in August 18, 2020. She
holds a bachelor’s degree of architecture from the School
of Planning and Architecture, New Delhi and a post
graduate diploma in management from the Indian Institute
of Management, Ahmedabad. She worked with Bain &
Company India Private Limited.-

Kumar, Anjalli Ravi Chief Sustainability Officer
Ms. Anjalli Ravi Kumar serves as Chief Sustainability Officer Senior Key Executive
of Zomato Limited since December 2021. A Harvard
Kennedy School alumnus, Ms. Kumar worked as Unilever as
Global Sustainability Director. She is a recipient of the
Unilever Global Heroes Award in 2017. She has also worked
with KPMG's Climate Change Advisory.-

Independent and Non- Executive directors

Board
Members
Name Title Background Job Functions Other Boards
Dutta, Kaushik Independent Chairman of the Mr. Kaushik Dutta has been Independent Director Chairman of the Board, PB Fintech Limited
Board at Resilient Innovations Private Limited since Member of the Board of (NSEI:POLICYBZR), Resilient
September 2022. He has been the Independent Directors, Member of Innovations Private Limited
Chairman of the Board at Zomato Limited since Audit Committee, Member
March 1, 2021. He has been a Non-Executive of Nominating Committee,
Independent Director of PB Fintech Limited Member of Compensation
(formerly, PB Fintech Private Limited and Committee, Member of
ETECHACES Marketing and Consulting Private Risk Committee, Chairman
Limited) since June 19, 2021. He joined PB Fintech of Audit Committee
Limited on June 19, 2021. He is co-founder of
Thought Arbitrage Research Institute, an
independent not-for-profit research think tank
working in areas of corporate governance, public
policy, and sustainability.
Goyal, Co-Founder, MD, CEO & Director Mr. Deepinder Goyal was Independent Director of Chief Executive Officer, Samast Technologies Private
Deepinder UrbanClap Technologies India Private Limited Top Key Executive, Limited, UrbanClap Technologies
from April 2022 until March 2023. He is a Co- Member of the Board of India Private Limited (Prior)
Founder of Zomato Limited since 2008 and serves Directors, Member of
as its Chief Executive Officer since July 2008. He is Corporate Governance
Managing Director at Zomato Limited since March Committee, Member of
24, 2021.. Risk Committee, Chairman
of Risk Committee

Source: Company Analysis

 Academic Research Project- Not a Recommendation

Zomato Ltd.

Bikhchandani, Non-Executive Director Mr. Sanjeev Bikhchandani serves as Promoter at Member of the Board of Allcheckdeals India Private
Sanjeev Info Edge (India) Limited. He is Non-Executive Directors, Member of Limited, Centre for Innovation
Director at Zomato Limited since April 13, 2018. Audit Committee, Member Incubation and
He serves as Managing Director and Chief of Nominating Committee, Entrepreneurship, Centum
Executive Officer of Naukri Internet Services Member of Compensation Learning Limited, Four-S Services
Limited (Alternate name: Naukri Internet Services Committee, Member of Pvt. Ltd., Info Edge (India)
Pvt. Ltd.). Mr. Bikhchandani serves as an Advisor Corporate Governance Limited (NSEI:NAUKRI),
of Four-S Services Pvt. Ltd, MakeMyTrip (India) Committee, Chairman of Jeevansathi Internet Services
Private Limited and MakeMyTrip Limited. He is Corporate Governance Private Limited, Makesense
the Founder and Executive Vice Chairman of Committee Technologies Limited, Naukri
Naukri.doc. He worked in advertising at Lintas Internet Services Limited, Value
India Ltd., a marketing position at HMM Limited Edge Research Services Pvt. Ltd.,
and a senior management position at CMYK MakeMyTrip (India) Private
Printech Private Limited and in marketing at Limited (Prior)
SmithKline Beecham. He is a Co-Owner at
Endeavour Holding Trust. He Co-founded Info
Edge (India) Ltd., in 1990 and also has been its
Executive Vice Chairman since July 26, 2010 and
serves as its Whole-Time Director since May 1,
1995. He served as the Chief Executive Officer and
Managing Director of Info Edge (India) Ltd., and its
subsidiary, Naukri Internet Services Pvt. Ltd. until
July 26, 2010.
Gupta, Namita Independent Director Ms. Namita Gupta serves as Independent Director Member of the Board of Honasa Consumer Limited
at Zomato Limited since March 01, 2021. She Directors, Member of
serves as Advisor at Venture Highway LLP Audit Committee, Member
(formerly known as VH Capital). He serves as an of Nominating Committee,
Independent Director since June 08, 2022 at Member of Compensation
Honasa Consumer Private Limited. Prior to this, Committee, Member of
she served as Chief Product Officer at Zomato, Corporate Governance
where she led product development. Prior to this, Committee, Member of
she served as Head of Global Games Partner Risk Committee, Chairman
Engineering at Face book. Prior to this, she served of Compensation
as Senior Program Manager at Microsoft where Committee, Chairman of
she worked extensively on developer platforms Nominating Committee
and web-search. She holds integrated M. Tech
and B.Tech in Computer Science and Math from
the Indian Institute of Technology, Delhi in 2001.
She is the founder and currently on the board of
directors of Airveda Technologies Private Limited.-
Banerjee, Independent Director Mrs. Sutapa Banerjee has been Additional Non- Member of the Board of Camlin Fine Sciences Limited
Sutapa Executive Independent Director at Polycab India Directors, Member of (BSE:532834), Godrej Properties
Limited since May 13, 2021. She serves as Audit Committee Limited (NSEI:GODREJPROP),
Independent Director at Zomato Limited since ideaForge Technology Limited,
April 12, 2021. She has been an Independent JSW Cement Limited, JSW
Director of Camlin Fine Sciences Limited since Holdings Limited (NSEI:JSWHL),
February 7, 2020. She serves as Additional Non- Polycab India Limited
Executive & Independent Director of Godrej (NSEI:POLYCAB),
Properties Limited since November 05, 2019. She
is Independent Director of ideaForge Technology
Limited since December 14, 2022.
Soni, Gunjan Independent Director Ms. Gunjan Tilak Raj Soni serves as Independent Member of the Board of -
Tilak Raj Director at Zomato Limited since April 19, 2021. Directors, Member of Risk
She holds a bachelor’s degree in engineering in Committee
computer science from the Barkatullah
Vishwavidalaya, Bhopal and a post graduate
diploma in business management from XLRI,
Jamshedpur. She is currently the chief executive
officer of Zalora Group. She also has extensive
experience across various roles in Myntra Jabong
India Private Limited, Star India Private Limited
and Mckinsey & Company, Inc.-
Ved, Aparna Independent Director Ms. Aparna Popat Ved serves as Independent Member of the Board of -
Popat Director at Zomato Limitedsince April 19, 2021. Directors
She holds a bachelor’s degree in commerce from
the University of Mumbai and a master’s degree
of business administration from the Sikkim
Manipal University.

Source: Company Analysis

Academic Research Project- Not a Recommendation

Zomato Ltd.

Commentary

The company has strong management with vast experience and technical expertise. Further, the Independent directors come from
diversified industries and include dignifies professions such as finance, economics , political science, engineering, integrated computing, etc.
Basis of screening of publicly data available, we do not found any prominent political connection of leadership and independent directors
with national and regional political parties. Further, we found any conflict of interest of independent directors with the company, as
reported. Zomato has a Corporate governance score of 67 which fall in the category of good companies and above it are leadership
companies which is based on a checklist of Indian Corporate Governance Scorecard, developed jointly by the BSE, IFC and Institutional
Investor Advisory Services (IiAS), with the financial support of the Government of Japan

The current managing director of the company Mr. Deepinder Goyal has Co-founded the company in 2008 and serves as its Chief Executive
Officer since July 2008. Mr. Goyal guides the team at Zomato Media Pvt. Ltd. on overall strategy ranging from customer acquisition, legal
issues, competitor benchmarking, marketing strategy, growth and sustainability. The other management was hired and promoted as per
their competencies and technical expertise. Deloitte Haskins & Sells is the auditor and there was no qualifications/emphasis of matters
highlighted by them in the FY22 Annual Report. Related party transactions have remained steady in the past 4 years even with increase in
business. There are many of classes of share issued and are compulsory convertible share

Shareholding pattern

The company has majority of holdings with Fiis and public which states that Zomato is a foreign owned company . As on June 23 Fiis are
holding 54.43%, Diis are hlolding 9.93%, public and others are holding 33.56% and 2.09% respectively. There has been decrease in holdings,
it is not significant to conclude management’s strategic exit from the business.

Quarterly shareholdings is as under:

Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23

FIIs 10.27% 11.31% 10.44% 9.98% 57.87% 56.74% 54.61% 54.43%
DIIs 4.73% 4.37% 3.05% 2.62% 6.41% 7.43% 8.04% 9.93%
Public 81.43% 81.35% 83.60% 84.59% 33.24% 33.57% 35.15% 33.56%
Others 3.57% 2.97% 2.91% 2.81% 2.48% 2.26% 2.22% 2.09%

Mar-22 Mar-23 Sep-23

FIIs 10.44% 54.61% 54.72%
DIIs 3.05% 8.04% 13.04%
Public 83.60% 35.15% 30.42%
Others 2.91% 2.22% 1.82%

Quarterly FII holding pattern

70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23

Source: Screener.in
Academic Research Project- Not a Recommendation

Zomato Ltd.

Commentary

Management Remuneration

The ratio of remuneration of each directors and KMP to the median remuneration of the employees of the Company for the financial year,
remuneration and percentage increase in remuneration detail are as under:
Ratio of remuneration of
each director to the
median remuneration of
employees for financial
year ended on March 31, % increase in Sales growth
Designation 2023 FY23 remuneration YoY%
Managing Director and Chief
Mr. Deepinder Goyal Executive Officer -5 0 0 69%

Mr. Akshant Goyal Chief Financial Officer -6 0 0 69%

Company Secretary and
Ms. Sandhya Sethia Compliance Officer 5.2 5.2 10 69%

There has been no increase in the overall median remuneration of employees. Permanent employees on the rolls of the Company as on
March 31, 2023 were 3,440 (three thousand four hundred and forty). Increase in the average salaries of employee other than managerial
personnel is 3.8%. Increase in the average salaries of employee other than managerial personnel is 3.8%. It is hereby affirmed that the
remuneration paid to directors, KMP and members of senior management is as per the NRC Policy of the Company.

The revenue grew at 75% CAGR over the last 5 years and 40% CAGR over the last 3 years and ony Company secretary and compliance officer
salary increase by 10% over the years.

Ratio of remuneration of
each director to the
median remuneration of
employees for financial
year ended on March 31, % increase in Sales growth
Designation 2023 FY23 remuneration YoY%
Managing Director and Chief
Mr. Deepinder Goyal Executive Officer -5 0 0 69%

Mr. Akshant Goyal Chief Financial Officer -6 0 0 69%

Company Secretary and
Ms. Sandhya Sethia Compliance Officer 5.2 5.2 10 69%

Board Efficiency

Basis of our research Boards of Directors (BOD) has adequate representation of independent directors, industry experts, finance and legal
experts as required by statue.

The efficiency of BOD can be gauged with their contribution in various important meetings held in FY23. The details are as under:

Name of directors No.of board meeting Date of AGM

Held Attended AUG 30, 2022
Mr. Kaushik Dutta 8 8 Attended
Ms. Aparna Popat Ved 8 8 Not Attended
Mr. Deepinder Goyal 8 7 Attended
Mr. Douglas Feagin 8 5 Not Attended
Mr Gunjan Tilak Raj Soni 8 8 Not Attended
Ms. Namita Gupta 8 7 Attended
Mr. Sanjeev Bikhchandani 8 7 Attended
Ms. Sutapa Banerjee 8 8 Attended

Mr. Douglas Feagin resigned from Directorship w.e.f. February 9, 2023.

Source: Annual report
Academic Research Project- Not a Recommendation

Zomato Ltd.

Quarterly Snapshot

Particulars Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23

Sales 266.0 426.0 609.4 692.4 844.4 1024.2 1112.0 1211.8 1414.0 1661.3 1948.2 2056.0 2416.0

Expenses 346.9 548.0 720.1 845.9 1220.9 1560.0 1600.9 1661.5 1721.0 1972.7 2314.4 2282.0 2464.0

Operating Profit -80.9 -122.0 -110.7 -153.5 -376.5 -535.8 -488.9 -449.7 -307.0 -311.4 -366.2 -226.0 -48.0
OPM % -0.3 -0.3 -0.2 -0.2 -0.4 -0.5 -0.4 -0.4 -0.2 -0.2 -0.2 -0.1 0.0
Other Income 17.5 -70.9 -205.0 58.4 56.3 142.4 463.5 130.5 168.0 169.5 173.4 171.0 181.0
Interest 1.8 2.0 1.8 4.5 3.3 3.1 3.1 2.5 5.0 11.9 16.1 15.0 18.0
Depreciation 34.6 34.9 33.8 34.6 35.5 38.4 38.7 37.7 42.0 106.7 154.8 134.0 130.0
Profit before tax -99.8 -229.8 -351.3 -134.2 -359.0 -434.9 -67.2 -359.4 -186.0 -260.5 -363.7 -204.0 -15.0
Tax % 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 1.1
Net Profit -99.8 -229.8 -352.6 -134.2 -360.7 -434.9 -67.2 -359.7 -186.0 -250.8 -346.6 -188.0 2.0

Annual Snapshot

FY18 FY19 FY20 FY21 FY22 FY23 FY24E FY25E FY26E

Sales 466.00 1313.00 2605.00 1994.00 4192.00 7079.00 10,850 15,443 20,215
Expenses 558.00 3556.00 4909.00 2461.00 6043.00 8290.00 10784.00 14636.00 18625.00
Operating Profit -92.00 -2243.00 -2305.00 -467.00 -1851.00 -1211.00 66 797 1,590
OPM % -20% -171% -88% -23% -44% -17% 1% 5% 8%
Other Income 21.00 1285.00 16.00 -200.00 793.00 682.00 569.00 548.00 590.00
Interest 6.00 9.00 13.00 10.00 12.00 49.00 72.00 102.00 134.00
Depreciation 29.00 43.00 84.00 138.00 150.00 437.00 519 500 488
Profit before tax -107.00 -1010.00 -2386.00 -815.00 -1220.00 -1015.00 44.00 743.00 1558.00
Tax % 0.00% 0.00% 0.00% 0.00% 0.00% 4.00% 0% 0% 0%
Net Profit -107.00 -1010.00 -2386.00 -816.00 -1222.00 -971.00 44.00 743.00 1558.00

Valuation Ratios FY22 FY23 FY24E FY25E

Enterprise Value (EV) 63280.5 43112.7 - -

EV/EBITDA -34.19 -35.61 - -
Price/Earnings -52.99 -44.93 - -
Price/Sales 15.45 6.16 - -
Price/CFO -93.49 -51.69 - -
Price/Book Value 3.93 2.24 3.2 3.1

Source: Screener.in, multiple reports

Academic Research Project- Not a Recommendation
Zomato Ltd.
Commentary
Revenue
Growth rate in Blinkit of 60% plus on GOV for the foreseeable future 25000
and overall Adjusted Revenue growth of 40% plus. I'm wondering if
your understanding of this 40% is only for food delivery because this 20000
is a guidance at the overall revenue level, which even in the last 4, 5
quarters, has been north of 50% year-on-year. I think given we have
15000
a portfolio of businesses and while food delivery growth has been
relatively muted last few quarters, which is what you're also saying,
but at the same time, Hyperpure, Dining Out and Blinkit have grown 10000
really well. And I think the message here is that as a portfolio we will
continue to grow at that pace while some business may grow faster 5000
than others. Last one quarter, we've grown 11% on GOV terms
sequentially and around 15% on a revenue basis for the food
delivery business. So, if we are doing that in 1 quarter, I think we
can easily aim for a 25%, 30% growth on revenue on food, this year
and the next. I think the assumption here is that the worst is behind
us in terms of the demand slowdown that we saw. And from here
on, incrementally, we should see that recover. And hence, we feel
confident about being able to deliver this topline growth. And
likewise, on the Blinkit business, we've seen ads as a decent driver
of or a meaningful driver of revenue expansion, top line expansion
for Blinkit. And the journey there is much less mature than it is on
food, and we believe that there are meaningful gains to be made on
ad sales in the Blinkit business, which would drive a large part of our
progress to profitability from here on.
Food inflation is impacting restaurants, but because their sales are
getting impacted, they are also ending up spending more on
advertising and trying to grow the business. Overall, yes, there is
some stress, they're also taking the right initiatives to ensure that
growth continues on the platform. I think this inflation being up and
down will be a characteristic that all businesses have to deal with,
and they are also dealing with. one of the initiatives that we took up
over there was to increase our minimum order value for restaurants
to order on the platform. And that resulted in some churning out of
the small unprofitable restaurants who were not meeting that
minimum order criteria. And to that extent, yes, there was some
churn, overall, it resulted in an increase in revenue because
restaurants that were on the fence were able to increase their
average order values and that also had a positive impact on the
profitability of the business.
We do see a lot of expansion of the wallet share of customers
because they're now starting to buy a lot more things than just the
core grocery categories from us. That leads to both order growth,
revenue growth and obviously, we're able to harness the operating
leverage that exists in a high fixed cost model like ours. I think
there's nothing out of the ordinary in terms of how we think we will
get to Adjusted EBITDA positive. And of course, there will be
innovations along the way that we hope that we continue to make
to get to that juncture.
Source: Company Analysis
Sales vs Sales growth
Sales Sales growth 200%
150%
100%
50%
0%
0 -50%
FY18 FY19 FY20 FY21 FY22 FY23 FY24EFY25EFY26E
Margins
Medium-term sustainable margins in food, which is Adjusted
EBITDA as a percentage of GOV. 4% to 5% is what management are
looking at in the next few quarters The mindset with which
company operate is that we are always looking to bring more
convenience with more product categories for our customers. So,
we've been increasing the size of portfolio available in 10 minutes to
our customers consistently over the last one year, and that is what is
leading to improvement in the overall both the ticket size as well as
the margins for us. And I think we'll continue to do that into the
future as well. The first is on contribution margins in food business,
which is now at 6.4%, for you to hit your target of 4% to 5% Adjusted
EBITDA margins, There is some bit of operating leverage which will
continue as we scale in this business. So, if the EBITDA margin goes
up by 2 percentage points, we can get there even with a slightly
lower contribution margin growth, That is what we are aiming for,
and we believe that should get us to the 4% to 5% EBITDA margin in
this business. Food delivery margins are at 2.5% and there has been
obviously a dramatic improvement. It's a highly competitive market.
There are multiple variables at play here, including the demand
seasonality and competition. So, I think we feel confident of getting
there in a few quarters, but exactly from here on, whether it's going
to be linear or not,.
Margins
0.0%
-50.0%
-100.0%
-150.0%
-200.0%
Operating Margin PBT Margin Net Margin
Academic Research Project- Not a Recommendation

Zomato Ltd.

Commentary
GOV, AOV, MTU’s

If you look at this last one quarter, we've grown 11% on GOV terms MTU × FREQUENCY = ORDERS AOV = GOV
sequentially and around 15% on a revenue basis for the food
delivery business. So, if we are doing that in 1 quarter, I think we
can easily aim for a 25%, 30% growth on revenue on food, this year
and the next. I think the assumption here is that the worst is behind GOV × TAKE RATE = REVENUE
us in terms of the demand slowdown that we saw. And from here
on, incrementally, we should see that recover. And hence, we feel
confident about being able to deliver this topline growth. The GOV
per store that we display, it depends more on whether we open a 450
lot of new locations and where we are opening those new locations, 400
and the kind of geography in the high order density locations where 350
we expect the demand to increase a lot faster. It's hard to put a 300
track on whether it will go up, go down a little bit and then come 250
back up. That depends a lot on a number of factors, which includes 200
pace of store opening and also the quality of the polygons in which
150
we are opening those stores. our business, because it deals with
such a wide variety of products, the AOV movement does tend to 100
move with seasons as well. This quarter's AOV movement that 50
you're seeing, part of it was also a result of the fact that we were a 0
little bit supply constrained, but that drove about 25% of the overall -50 FY20 FY21 FY22 FY23E FY24E FY25E
AOV improvement. The rest of it is mostly seasonal changes,
consumption patterns, especially in the core FMCG and grocery GOV(INRb) Growth(%)
space. And that's what usually drives up the AOV during some parts
of the month. So, you will see more variability in AOV, not
consistently going up or down, but we take that into our business
projections and how we think about the business. The AOVs were AOV (INR millions)
lesser, what we mentioned was that the MTUs got impacted to
some extent as multiple individual users in the same family were FY25E
ordering from the same account. We don't see any major shift in the FY24E
position that we saw even earlier. So AOVs are slightly higher than
normal AOVs and the frequency of ordering, of course, is FY23E
significantly higher. Part of that could be because of the clubbing of FY22
orders, but part of it is also genuinely because there are free
delivery benefits and other benefits. Even in this quarter, you have FY21
seen the MTU grow. So, we expect that to continue. FY20

0 100 200 300 400 500

FY20 FY21 FY22 FY23 FY24E FY25E

MTU 10.7 6.8 14.7 17.2 19.2 22.1
Order Frequency 3.1 2.9 3 3.2 3.3 3.5
Order/Month 33.6 19.9 44.6 54.9 64.1 78.2
Order/Year 403 239 535 659 769 939
AOV 278 397 398 398 400 409
Delivery GOV 112209 94829 213000 262403 307985 384051
Take rate(%) 17.3 15.7 16 17.1 17.4 17.6
Delivery Revenue 19389 14907 34186 44851 53490 67428
Blinkit Revenue 0 0 0 7729 13476 16673
Hyperpure Revenue 1076 2002 5350 14980 21571 27784
others 5582 3029 2338 2904 5139 5913
Revenue 26047 19938 41924 70464 93676 117798

Source: Multiple reports

Academic Research Project- Not a Recommendation

Zomato Ltd.

Dupont Analysis

Revenues (INR Crs.) Net Profit (INR Crs.)

7,079
2020 2021 2022 2023

4,192
-813
2,605 -971
1,994 -1,209

2020 2021 2022 2023 -2,367

Return on Equity (%) Average Total Assets (INR Crs.)

2020 2021 2022 2023 19,463

-20.07% -10.01% -5.40%
13,015

5,802
3,157

-168.30%
2020 2021 2022 2023

Return on Asset (%) Financial Leverage

2.24x
2020 2021 2022 2023
-4.99%
-14.01% -9.29% 1.43x
1.08x 1.08x

-74.99% 2020 2021 2022 2023

Source: Company Analysis

 Academic Research Project- Not a Recommendation

Zomato Ltd.

Dupont Analysis

Return on Equity (ROE)

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit -103.7 -965.0 -2,367.2 -812.8 -1,208.7 -971.3
Average Shareholder Equity 518.0 1,695.9 1,406.5 4,050.6 12,074.7 17,982.7

Return on Equity -20.01% -56.90% -168.30% -20.07% -10.01% -5.40%

ROE - Dupont Equation

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit -103.7 -965.0 -2,367.2 -812.8 -1,208.7 -971.3
Revenue 466.0 1,312.6 2,604.7 1,993.8 4,192.4 7,079.4
Net Profit Margin (A) -22.25% -73.51% -90.88% -40.77% -28.83% -13.72%

Revenue 466.0 1,312.6 2,604.7 1,993.8 4,192.4 7,079.4

Average Total Asset 687.2 2,393.7 3,156.6 5,801.9 13,015.3 19,462.9
Asset Turnover Ratio (B) 0.7x 0.5x 0.8x 0.3x 0.3x 0.4x

Average Total Asset 687.2 2,393.7 3,156.6 5,801.9 13,015.3 19,462.9

Average Shareholder Equity 518.0 1,695.9 1,406.5 4,050.6 12,074.7 17,982.7
Equity Multiplier (C) 1.33x 1.41x 2.24x 1.43x 1.08x 1.08x

Return on Equity (A*B*C) -20.01% -56.90% -168.30% -20.07% -10.01% -5.40%

Return on Asset
Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit -103.7 -965.0 -2,367.2 -812.8 -1,208.7 -971.3
Average Total Asset 687.2 2,393.7 3,156.6 5,801.9 13,015.3 19,462.9
Return on Asset -15.09% -40.31% -74.99% -14.01% -9.29% -4.99%

ROA - Dupont Equation

Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit -103.7 -965.0 -2,367.2 -812.8 -1,208.7 -971.3
Revenue 466.0 1,312.6 2,604.7 1,993.8 4,192.4 7,079.4
Net Profit Margin (A) -22.25% -73.51% -90.88% -40.77% -28.83% -13.72%

Revenue 466.0 1,312.6 2,604.7 1,993.8 4,192.4 7,079.4

Average Total Asset 687.2 2,393.7 3,156.6 5,801.9 13,015.3 19,462.9
Asset Turnover Ratio (B) 0.7x 0.5x 0.8x 0.3x 0.3x 0.4x

Return on Asset (A*B) -15.09% -40.31% -74.99% -14.01% -9.29% -4.99%

Dupont Summary

• ROE of Zomato has been decreased to -168.30% during COVID and made a low of -20.7% in FY2021 which now has rose to post covid
levels but still negative and currently at -5.40% as of 31 March 2023.
• ROE has been increased significantly in past 6 years from -20.01% to 5.40%. While the company was able to increase the net margins
from -22.25% in FY2018 to -13.72% in FY23.
• ROA of Zomato has been increased from -15.09% in FY2018 to -4.99% in FY2023

Source: Company Analysis

 Academic Research Project- Not a Recommendation

Zomato Ltd.

Peer stock performance (1y) - Indexed

20-Oct 20-Nov 20-Dec 20-Jan 20-Feb 20-Mar 20-Apr 20-May 20-Jun 20-Jul 20-Aug 20-Sep 20-Oct

DASH DHER,DE TKWY MEITUAN ZOMATO

Source: Yahoo Finance

CMP Implied shares outstanding EV EBITDA

Peers P/E P/S Beta EV/EBITDA PAT margins OPM ROE(%) ROA(%)
(in USD) (in billions) (in Billions) (in millions)

DoorDash 74.5 0.3933 26.34 87.72 3.83 1.6 -686 -30.85 -16.47% -12.42% -18.41% -6.11%
Delivery Hero 26.32 0.30 10.42 - 2.9 1.09 -833.40 -12.5 -24.14% -9.15% -61.32% -5.61%
Just Eat Takeaway 12.31 0.24 2.79 - 2.09 0.98 -198.28 -14.07 -45.60% -10.90% -27.35% -2.76%
Meituan 14.03 6.24 79.11 - 4.9 0.87 1449.86 54.56 3.28% 2% 6.16% 1.23%
Zomato 1.35 8.66 10.11 - 1.58 0.01 -114.97 -87.93 -9.69% -18.27% - -

Source: Yahoo Finance

Academic Research Project- Not a Recommendation

Zomato Ltd.

Analyst Coverage Universe

DATE Research House PRICE AT RECO Ratings TARGET

24-Aug-23 Ventura 93.8 Buy 156

08-Aug-23 Geojit BNP Paribas 93.45 Buy 114

04-Aug-23 Motilal Oswal 95.4 Buy 110
04-Aug-23 ICICI Securities Limited 86.55 Buy 120
23-May-23 Motilal Oswal 63.5 Buy 80
22-May-23 ICICI Securities Limited 64.5 Buy 83

Source: Trendlyne

Disclaimer: This is an academic project and doesn't meant for commercial usage.

This information/document does not constitute an offer to sell or solicitation for the purchase or sale
of any financial instrument or as an official confirmation of any transaction. The information
contained herein is obtained from publicly available data or other sources believed to be reliable and
the Author has not independently verified the accuracy and completeness of the said data and hence
it should not be relied upon as such.

The author is not SEBI registered investment analyst. This document is prepared as part of an
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