Here is my take on Q3 results:
1. Food delivery
- Growth: Decent. QOQ dergowth, because December is a historically week quarter historically due to travel, vacations etc.
- Margin: I have no clue what adjusted EBITDA means, so I can’t comment
2. Hyperpure
- Growth: Strong. QOQ increase, 100%+ yoy increase.
- Margin: I have no clue what adjusted EBITDA means, so I can’t comment
3. Quick commerce
- Growth: Disappointed. 50 day revenue was 142 Cr last quarter, and this quarter they did 301 Cr. So about 20% growth after adjustment (pun intended)
- Margin: I have no clue what adjusted EBITDA means, so I can’t comment
Given the limited information from Zomato’s balance sheet, I felt compelled to another company door dash, which is in a similar business (minus Hyperpure). The stock price seem directionally correlated (extent of direction varies)
In comparison to DD, Zomato is over-value in every respect
A few other things to consider:
- Zomato has a higher growth rate, but DD is not too far behind. Growth rates are difficult to decipher due to acquisitions, lock-down impact etc
- Unit economics are much better for DD
In my opinion, I think there is still froth in valuations. My view is closer to Aswath Damodaran, that 35-40 is the deep-value price (assuming 50% premium basis comparison with DD)
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