What is “Zomato Crisis – Kya Karein Investors?”

"Zomato Crisis - Kya Karein Investors?"

March mai 10-minute delivery ke announcement se leke July mai Blinkit ke acquisition ko lekar, Zomato iss saal kaafi news mai raha for all the wrong reasons. Aur phir ek wakt aisa aaya ki yeh no promoter company ke shares 41.35 tak pahuch gaye. Ab Zomato ke share price 60 ke range mai chal rahe hain, lekin ek baar phir Zomato ek crisis se gujar raha hai.

Aayie chaliye dekhte hain iss naye crisis ko nazdeek se

Zomato ke co-founder Mohit Gupta ne kuch din pehle apna resignation diya hai. Interestingly, iss mahine mai Zomato mai management level par yeh teesra exit hai. Iske pehle Siddharth Jhawar (Head of Intercity Legends) aur Rahul Ganjoo (Head of New Initiatives) ne bhi apna resignation dekar Zomato se apni duri bana li hai.

Iske pehle bhi August mai Deputy CFO Nitin Savara ne apna resignation diya tha.

Ek ke baad ek senior management level par exit usually acha nahi manna jaata hai. In fact, yeh management level par kissi trouble ka sign maana jaata hai. Khaas kar ke stock market toh aise disruptions bilkul hi pasand nahi karta hai, aur senior management exits ko negatively hi leta hai.

Abhi kuchi samay se Zomato kaafi acha perform kar raha tha market mai aur sabhi ka yehi maan-na tha ki management ab finally growth par nahi balki profitability par focus kar rahi hai. Quarterly earning ke baad bhi company ko appreciation mila ki kaise ab Zomato pehle ke comparison mai better disclosure practices use kar raha hai.

Sab kuch thik chal raha tha ki yeh resignation ki line lag gayi aur phir layoffs jisme 150 log affected huye hain.

Last year Zomato ne apne operations US, Singapore, Lebanon aur UK mai band kar diye tha. Iss week sunne mai aaya hai ki UAE mai bhi operations shut ho jayenge Zomato Ke.

Toh kya karne chahiye Zomato shares ke saath – buy, sell ya hold?
Chailye dekhte hain Zomato ke fundamentals

Market cap ₹ 54,902.20 cr.

Enterprise value ₹ 53,437.50 cr.

No. Of shares 855.17 cr.

P/E 0

P/B 2.7

Face value ₹ 1

Div. Yield 0 %

Book value (TTM) ₹ 23.78

Promoter holding 0 %

EPS (TTM) ₹ -0.61

ROE -9.53 %

ROCE -8.75%

Profit growth -23.93 %

 
Profit & Loss (All Figures in Cr. Adjusted EPS in Rs.)

 

PARTICULARS

MAR 2018

MAR 2019

MAR 2020

MAR 2021

MAR 2022

Net Sales 

371.03

1,162.87

2,336.35

1,713.90

3,611

Total Expenditure 

423.96

3,303.82

4,574.63

2,052.90

5,249

Operating Profit 

-52.93

-2,140.95

-2,238.29

-339

-1,638

Other Income 

17.78

94.16

181.01

136.60

508.10

Interest 

24.13

58.51

11.13

7.90

5.50

Depreciation 

12.51

23.19

73.60

128.90

133.40

Exceptional Items 

-6.70

1,188.02

-309.18

-546.80

171

Profit Before Tax 

-78.49

-940.47

-2,451.18

-886

-1,097.80

Tax 

0

0

0

0

0.20

Net Profit 

-78.49

-940.47

-2,451.18

-886

-1,098

Adjusted EPS (Rs.) 

-2,616.43

-27,660.79

-81,705.90

0

-1.44

Cash Flows (All Figures are in Crores.)

 

PARTICULARS

MAR 2018

MAR 2019

MAR 2020

MAR 2021

MAR 2022

Profit from operations 

-78.49

-940.47

-2,451.18

-886

-1,097.80

   

Adjustment 

13.84

-928.24

419.72

736.10

356.80

   

Changes in Assets & Liabilities 

6.42

158.33

-10.58

-130.30

267.10

   

Tax Paid 

-3.44

-8.17

-31.87

-0.80

-34.70

   

Operating Cash Flow 

-61.67

-1,718.54

-2,073.91

-281

-508.60

   

Investing Cash Flow 

-895.26

-1,315.25

1,646.04

-6,114.90

-8,128.70

   

Financing Cash Flow 

968.99

3,150.32

362.28

6,474.50

8,762.80

   

Net Cash Flow 

12.06

116.53

-65.58

78.60

125.50

   
Toh kya karna chahiye investors ko?
Dekhte hain top brokerage houses ka kehna -

Top brokerages have given their recommendations on this stock. While Jefferies has remained bullish, estimating an upside of nearly 60 per cent or target of Rs 100, Macquarie has maintained a ‘Neutral’ rating with a price target of Rs 60. Morgan Stanley has given an ‘Overweight’ rating with a target of Rs 92.  

The company has claimed that it will soon breakeven and turn profitable. In the quarter ended 30 September the company posted net loss of Rs 251 crore narrowing it from Rs 430 crore the company reported a year back. 

Moreover, none of the people who resigned from Zomato were key managerial personnel (KMP) and the disclosures were made voluntarily. As per the law, companies are mandated to disclose exits of KMPs only.

Some of the recent resignations may not be a big headache for the company as they were getting redundant to an extent after the management said it will be focussing mainly on three businesses: Deepinder Goyal directly leading food delivery and overseeing ther other two businesses; Albinder Dhindsa heading Blinkit; and, Hyperpure under Rakesh Ranjan.

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