Expect Zomato to be EBITDA positive by FY25: Vinit Bolinjkar
Zomato will evolve into a much bigger story than just food delivery
- Sakshi Batra
- Last Updated : July 14, 2021, 14:17 IST
Even as the man of the moment, Zomato founder Deepinder Goyal shared feelings about being stressed today on Twitter and wrote, “Ordered triple breakfast” as stress eating with a huge smiley, there seems no need perhaps for that as the IPO is going quite strong so far.
The retail portion was fully subscribed just within an hour of opening on Day 1. Ahead of the IPO, the anchor investors bought shares worth Rs 4,196 crore.
The IPO – India’s biggest this year – will be available for subscription till Friday, July 16, 2021. The price band of Zomato IPO is fixed at Rs 72-76 per share of the face value of Rs 1 each and the company aims to raise Rs 9,375 crore through the offer.
Vineet Bolinjakar of Ventura Securities spoke to Money9 and said, “The opportunity investors are getting in Zomato is unlike the traditional food segment. Zomato is present across the country in 525 cities which will only grow from here. There are great tailwinds for the company’s growth despite the steep valuation. When we consider global peers, the stock is growing at 52-59% growth rate CAGR for the next five years. We expect the company to be EBITDA breakeven by FY25.”
He also said that one can look at three parameters to judge the company’s growth including the market share, volume that they push and pricing to see how the revenue growth will play out.
On the risks for the company, he said that Amazon Food is not so much a concern as it is largely a duopoly in the market.
On the revenue streams he said, “We have many for Zomato, right now the take out rates are competitive and expected to go up. Secondly, Hyperpure is working well. They will be taking a stake in Grofers so they are getting into the grocery segment. Nutraceuticals is another one. Home made food to masses is something they can look at. So it is a great long term story with many growth moats to grow”
“For investors, it is definitely an IPO they can subscribe for both listing gains and long term as well”, he said.
Even as the man of the moment, Zomato founder Deepinder Goyal shared feelings about being stressed today on Twitter and wrote, “Ordered triple breakfast” as stress eating with a huge smiley, there seems no need perhaps for that as the IPO is going quite strong so far.
The retail portion was fully subscribed just within an hour of opening on Day 1. Ahead of the IPO, the anchor investors bought shares worth Rs 4,196 crore.
The IPO – India’s biggest this year – will be available for subscription till Friday, July 16, 2021. The price band of Zomato IPO is fixed at Rs 72-76 per share of the face value of Rs 1 each and the company aims to raise Rs 9,375 crore through the offer.
Vineet Bolinjakar of Ventura Securities spoke to Money9 and said, “The opportunity investors are getting in Zomato is unlike the traditional food segment. Zomato is present across the country in 525 cities which will only grow from here. There are great tailwinds for the company’s growth despite the steep valuation. When we consider global peers, the stock is growing at 52-59% growth rate CAGR for the next five years. We expect the company to be EBITDA breakeven by FY25.”
He also said that one can look at three parameters to judge the company’s growth including the market share, volume that they push and pricing to see how the revenue growth will play out.
On the risks for the company, he said that Amazon Food is not so much a concern as it is largely a duopoly in the market.
On the revenue streams he said, “We have many for Zomato, right now the take out rates are competitive and expected to go up. Secondly, Hyperpure is working well. They will be taking a stake in Grofers so they are getting into the grocery segment. Nutraceuticals is another one. Home made food to masses is something they can look at. So it is a great long term story with many growth moats to grow”
“For investors, it is definitely an IPO they can subscribe for both listing gains and long term as well”, he said.
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