Zomato's Strong Topline and Key Parameters Send Stock Soaring 10%

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • Aug 11, 2021 - Zomato's Strong Topline and Key Parameters Send Stock Soaring 10%

Zomato's Strong Topline and Key Parameters Send Stock Soaring 10%

Aug 11, 2021

Before Zomato's IPO, there was much hype about how the company would become profitable as food delivery is booming during the pandemic.

But the company's June quarter results say otherwise. Zomato's net loss widened in the June quarter.

Yesterday, the online food delivery platform reported a consolidated net loss of Rs 3.6 bn for the quarter ended June 2021. This compared with a net loss of Rs 1 bn in the year-ago quarter.

The loss for the June quarter was largely on account of non-cash employee stock option programme (ESOP) expenses, which increased meaningfully due to significant ESOP grants made in the quarter pursuant to creation of a new scheme.

--- Advertisement ---
Going LIVE Today: EV Gold Rush Special Event

Today at 5 PM sharp, we will go LIVE with our special event - the EV Gold Rush.

At the event, Tanushree will share with you the complete details of our multi-year research on electric vehicles...

Including details of 3 stocks to ride this massive 15x EV opportunity.

Tanushree believes these 3 stocks could potentially offer life-changing gains in the long run.

Don't miss it for anything.

Click the link below to register for free.

Click here to sign up for FREE.

The company reported adjusted sales growth of 26% year on year (YoY) to Rs 11.6 bn for the quarter under review.

Zomato considers adjusted sales as sum of revenue from operations plus customer delivery charges.

It must be noted that the YoY growth in adjusted sales is irrelevant as the year-ago quarter was adversely affected by the national lockdown to contain the spread of the Covid.

Adjusted Revenues

Gradual recovery in economic activities is expected to accelerate Zomato's topline growth in the coming quarters.

The company's total expenses in the June quarter stood at Rs 12.6 bn compared to Rs 3.8 bn in the corresponding quarter last year.

--- Advertisement ---
The Rebirth of India

India's leading research analyst, Tanushree Banerjee, will show our readers how an upcoming mega shift would drastically change the state of the Indian economy...

And how investing in three high-potential stocks at the heart of this rebirth...

...could potentially hand them 100%, 300%, 500%, even 1,000% or more in the long run.

Since you are one of our valued readers, we sincerely urge you to head over here for more details

On the operational front, its adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) rose to Rs 1.7 bn from Rs 1.2 bn in the previous quarter.

Employee expenses rose by 113%.

Here's a table comparing Zomato's results on key parameters.

Financial Snapshot

(Rs m) 21-Jun 21-Mar 20-Jun
Revenue from operations 8,444 6,924 2,660
Total expenses 12,597 8,850 3,833
Exceptional items 1.6 - -
Loss before tax -3,590 -1,342 -998
Tax 17 - -
Loss after tax -3,607 -1,342 -998
Data Source: Company Filings

Robust Indian food delivery business; dining-out suffers

Zomato's Indian food delivery business showed strength during the quarter as the company recorded its highest-ever gross order value, number of orders, transacting users and active delivery partners in its history.

The gross order value of the Indian food delivery business grew more than four-fold YoY to Rs 45.4 bn in the reported quarter. Sequentially, the growth was 37%.

Zomato's core food delivery business continued to grow despite the severe second wave starting April.

Zomato's dining-out business suffered in the June quarter because of the second wave and localised lockdowns.

New milestone

Zomato delivered its billionth order last week, its co-founder and chief executive officer Deepinder Goyal said.

  • It took us six years to get to this milestone and we hope it takes us much less time to deliver the next billion.

    The fact that 10% plus of these billion orders were delivered only in the last three months makes us confident about getting to the next billion much sooner.

Despite the company delivering its billionth order, Zomato's net loss widened.

Zomato has improved its pay structure during the course of the year. The company claims that the top 20% of its delivery partners who deliver on bikes and put in more than 40 hours a week received a payout of more than Rs 27,000 per month. It had 310,000 active delivery partners in July.

Going LIVE Today at 5pm: The EV Gold Rush Special Event

How the stock markets reacted to Zomato's results

Ahead of the results announcement, Zomato share price declined 4.2% to settle at Rs 124.95 apiece on the BSE yesterday.

Today, shares of the company opened 1% lower at Rs 122 on the BSE against its previous close.

Shares recovered as the session progressed and rallied as much as 5% to Rs 131.75.

Despite the company posting huge losses, shares climbed. This is because Zomato's topline is strong and its key parameters also showed signs of demand revival.

The huge demand for loss-making Zomato shows that investors have an appetite and patience for long-term stories.

On 23 July, Zomato got listed on the bourses and achieved a market capitalisation of Rs 1.08 lakh crore on the BSE, making it one of the few listed entities to enter the Rs 1 lakh crore marketcap club upon market debut.

It delivered significant gains on debut from its offer price of Rs 76.

About Zomato

Zomato was incorporated in the year 2010. The company, during its initial stages, started off as a restaurant finder.

Following in the footsteps of its competitor, Swiggy, the company formally launched its food delivery service in India in the year 2015.

By 2020, Zomato expanded its food delivery business to over 500 cities, facing stiff competition from both Swiggy and Uber Eats.

However, during the same year, the company acquired Uber Eats to consolidate its position in the food delivery space.

Based in Gurugram, the company generates most of its revenue from food delivery and related fees it charges restaurants. It also allows users to book tables online, leave reviews, and avail special discounts while eating at select restaurants.

Together with SoftBank-backed startup Swiggy, Zomato has come to dominate an Indian delivery market that benefited from the pandemic as people stayed in and turned to online ordering.

For more details, check out Zomato company fact sheet and quarterly results.

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Equitymaster requests your view! Post a comment on "Zomato's Strong Topline and Key Parameters Send Stock Soaring 10%". Click here!


More Views on News

Why Zomato Stopped its Grocery and Nutraceutical Businesses (Views On News)

Sep 13, 2021

Zomato believes its investment in Grofers will generate better results rather than its in-house grocery effort.

Zomato Delivers a Hot Listing. Did You Grab a Bite? (Views On News)

Jul 23, 2021

Zomato scripted history on Friday by becoming India's first unicorn to debut on the stock exchanges.

India's New Drone Scheme: Watch Out for these Stocks (Views On News)

Oct 1, 2021

New drone rules and the PLI scheme is a huge confidence booster for startups and MSMEs. It will open new opportunities for drone companies.

5 Indian Companies that are Buying Back Shares Big Time (Views On News)

Sep 8, 2021

In fiscal 2021, buybacks jumped to two-year high with 61 companies buying back shares worth Rs 392.9 bn.

7 Stocks With Highest FII Shareholding (Views On News)

Aug 26, 2021

Come hell or high water, these are top Indian stocks which FIIs never leave.

More Views on News

Most Popular

A Complete Guide for Beginners on How to Invest in IPOs

As an investor, you must have endeavoured to find a suitable opportunity for investing in IPOs. But do you know what is an IP...

5 Green Energy Stocks to Watch as India Readies for a Revolution (Views On News)

Oct 13, 2021

The excitement around green energy stocks has opened up a huge contrarian opportunity in the traditional energy space.

Could HDFC Bank be a Big EV Winner? The Answer Will Surprise You... (Profit Hunter)

Oct 13, 2021

Why should investors take it for granted that India's Tesla will be one of the major auto stocks?

Tata Group Stocks are on Fire: Which one Should You Buy? (Profit Hunter)

Oct 15, 2021

Tata group stocks are on fire. Find out which one deserves your attention.

Massive Surge in the Shares of Tata Motors Today. Key Factors Favouring the Rally (Views On News)

Oct 13, 2021

Tata Motors zooms 23% after report of TPG investing Rs 75 bn in EV arm.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Oct 22, 2021 (Close)