There is some confusing news floatingâŚhas he left Zomato or just the role he was in? He was leading their nutrition business last 1 year and couple days back Zomato announced its closure. But in some news items itâs mentioned that Gaurav will move to a role to start new nutrition business for ZomatoâŚalso in his letter he mentions he would continue to attend Zomato town hallsâŚ
This is the same guy who showed up to mulltiple interviews pre-IPO. Some great investor confidence. I donât think these shutting down plans developed suddenly. Management has always been guiding closure of the mentioned business and if he was to quit, why make him give interviews.
More than 2 days after the companyâs COO/ Co-Founder resignation (mentioned by CEO on Twitter), Zomato has not deemed it material enough to be disclosed to the exchanges.
It is infact the exchanges, which have now reached out to Zomato asking for a clarification.
And I found this article on the web:
Seems to be some technicality that he was not listed as a KMP because of the designation, changes, etc.
This is just beyond ridiculous that a 1 lakh+ crore market cap company hides behind some technicalities to not disclose such material info. And even after 2 days no one in the entire company understands the materiality of the event.
Pathetic corporate governance standards!
Overview and current status of online food order business from McKinsey.
The PIL could have major impact on the business models of companies like Uber, Ola, Zomato, Swiggy etc.
A couple of thoughts from an end consumer point of view -
When I was living in Mumbai I used to order a lot from Zomato or Home delivery services as going out in traffic was a pain. I was okay if the Dosa, Roti, or Pizza was a bit cold and lost half of its taste by the time it was delivered.
Now I live in a large town in Haryana and I donât want to pay 20-25% more for slightly cold food thatâs not as tasty as the fresh food I get in the restaurant. Also since there is no fear of covid (at least for now) and there is not much traffic in my small town.
I prefer to go out 1-2 times a week to eat out. Better, fresh, and cheaper food and also a good dining experience.
Zomato may not get the growth they are hoping for due to some of the above factors.
That brings me to a concern about how the orders will grow in future especially from smaller towns. How Cost reduction, the quantum of discounts, and employee expenses will shape up.
The quarterly losses are huge close to 343 Cr (if i am not wrong). if they reduce discounts and make ordered food more expensive, wonât customers switch back to ordering direct from restaurants or going out to eat food in a lot of cases?
Maybe now the dynamics are not favorable to you in terms of delivery but with the rising population in every town and conditions of traffic/roads, people getting busierâŚgradually the shift would happen
The ease of ordering and delivery can gradually make a person who orders 1-2 times a week, eventually 2-4 times. They may end up ordering even breakfast which earlier they werenât and even coffee with a cake for in between meals on some days
The stake in Grofers would increase grocery deliveries with time and above shift in city dynamics and consumer behavior would be a decent push.
But I agree to all your risks. I just wanted to mention some points that I can see as an opportunity and I am sure others who see capabilities in this business.
Disc: Very Small tracking position. Not a buy/sell recommendation
New businesses such as these might pose challenges for third party businesses like Zomato.
Fresh Issue was of âš9,000.00 Cr and Offer for Sale was of âš375.00 Cr.
Donât take me wrong, but looks like the author of this post has never analyzed any new age business. This is twisting of the facts. We can argue about valuation but canât say every loss making company should be worthless.
The author clearly doesnât understand value of platform, tech and soft assets. By this logic, In early years, Amazon, Google and Tesla would have been worthless even with dominant industry position.
Such messages are creation of WhatsApp University and waste of everyoneâs time.
Insightful video not sure how much it is relevant to this thread.
Last Quater Results:
Do not understand adjusted EBITA and adjusted revenue.
Losses increased
Decent analysis but not sure how Zomato will pull this off which is already facing tough challenges in their core food delivery business.
Disc:- Not invested
Short and interesting comparison of zomato Vs Swiggy by CNBC - ref JP Morgan report.
The duopoly food delivery market is expected to remain the same with Swiggy and Zomato controlling 50% of the market each. - not on video but found a financial express report.
- Anyone has access to JP Morgan report
- Any idea in past how mkt share changed between zomato and swiggy
Is there a place where Zomato mentions all its investments and % shareholding in a simple and easy to understand manner?