Zomato Q4 Results Review - Food Delivery Business Modest; Blinkit On Aggressive Expansion Mode: Dolat Capital

Dolat Capital Report

Zomato Ltd. reported revenue growth of 8.3% QoQ (our estimate: 7.4%) at Rs 35.6 billion. Food Delivery Biz. topline grew 2.1% QoQ, while HyperPure and Quick Commerce grew 10.7%/19% QoQ respectively.

For Food Delivery, gross order value/monthly transacting user posted - 0.6%/1.1% QoQ, leading to adjusted revenue of Rs 20.5 billion, down 0.6% QoQ. Blinkit Biz. achieved adjusted Ebitda break-even for the month of March.

Ebitda margin expanded to 2.4% (our estimate: 4.9%) from 1.6% in Q3. Miss happened due to lower contribution and higher ESOP cost (increased from Rs 1.2 billion to Rs 1.6 billion).

While robust execution continues to drive revenue upgrade, need for accelerated store expansion in BLINKIT would mean slower than anticipated improvement in Ebitda.

We mildly revise our earnings by -0.3%/-1% for FY25E/FY26E and noting well-priced growth and stretched valuations, maintain ‘Sell’rating with DCF based target price of Rs 110 (implies 44 times on FY26e earnings per share).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.