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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).
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