Brother,
They might expand into other categories, becoming like Amazon and Flipkart, where you can buy anything. Flipkart’s sales are ₹56,000 crore, yet they burn ₹4,800 crore. Amazon India generates ₹25,000 crore in sales but also loses money.
Imagine Blinkit, without warehouses or a pan-India distribution network, magically reaching Flipkart and Amazon’s sales levels in 10 years. That would mean ₹130,000 crore in sales from this vertical alone.
Based on these assumptions, Zomato and its subsidiaries could generate over ₹200,000 crore in sales, surpassing companies like HUL, Nestle, D-Mart, VBL, and many others. Adding Blinkit’s ₹130,000 crore would bring the total to ₹330,000 crore in sales.
With a 5% profit margin (remember, Amazon and Flipkart are losing money), they could achieve around ₹16,000 crore in profit. Using a price-to-earnings (PE) multiple of 50, their market capitalization would be around ₹8 lakh crore. This could potentially triple your investment, but it comes with significant risk. I doubt Zomato and its subsidiaries can effectively compete against BigBasket, Zepto, Instamart, JioMart, and others.
My assumptions are so absurd and exaggerated that even a child would see through them. They’re merely to highlight the irrationality of some people.
In my opinion, Zomato is unlikely to achieve substantial profits. I personally believe it will follow the path of Reliance Power, Yes Bank, or Unitech.
I urge anyone invested in Zomato to carefully consider these facts and evaluate their holdings.
