Zomato-Paytm Deal: Market Watchers Weigh In On Strategic Move
Here's a roundup of opinions from key market watchers on this deal.
Zomato's recent acquisition of Paytm's ticketing business has stirred discussions among industry experts about its strategic implications and future prospects. Here's a roundup of opinions from key market watchers on this deal.
Aniruddha Sarkar
CIO and Portfolio Manager, Quest Investment Advisors
Sarkar, highlighting the exceptional track record of Zomato's management in execution, suggested that while Zomato's integration of the ticketing business might take some time to fully synchronize, the potential benefits are noteworthy.
He pointed out that Zomato is a daily-use app for many, whether for food delivery or quick commerce through Blinkit. If the ticketing platform integrates smoothly, Sarkar foresees a high probability that users may turn to Zomato instead of other services like BookMyShow.
Pankaj Murarka
CIO at Renaissance Investment Managers
Murarka offers a perspective focussing on the separation between Zomato's acquisition and the exit of Ant Group. He dismissed any correlation between the two events, asserting that Ant Group's exit was likely a financial decision unrelated to Zomato's growth trajectory.
He explained that Ant Group's involvement was more of a financial investment, and the exit reflects the investment's profitability rather than any signal of Zomato's future performance.
Zomato's Acquisition Of Paytm Ticketing Business Positive But Most Brokerages Yet To Price In
Karan Taurani
Senior VP at Elara Capital
Taurani projected that the ticketing business could grow at a rate of 15-20% annually, adding significant value to Zomato’s top line.
He added that Zomato's ability to scale and match up to the market leader, BookMyShow, will be crucial. With a current topline of Rs 500 crore expected to rise to Rs 700 crore post-acquisition, Taurani noted that achieving even a 20% Ebitda margin in this competitive sector would enhance Zomato’s overall valuation.
He also highlighted the potential for increased free cash flow, with projections of Rs 2,000 to Rs 3,000 crore annually as the food and quick commerce segments continue to perform well.
Taurani emphasised that the acquisition is an opportunity for Zomato to leverage its young customer base and expand its B2C offerings, creating new cross-sell and upsell opportunities across its platforms.
He acknowledged the dominance of BookMyShow in the market but suggested that Zomato's strategic approach to integrating Paytm's ticketing business could give it bargaining power with content creators over time.
