Currently Zomato is going through a broad-based slowdown in demand, which started during the second half of Nov-24. Notwithstanding the current slowdown, management is positive about a recovery soon and remains confident of its long-term outlook of 20%+ yearly GOV growth in the business given the strong fundamentals.
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Zomato Ltd. reported Q3 FY25 revenues of Rs 54 billion, up 13% QoQ, in line with our estimate of 14% QoQ growth. Growth was led by Blinkit (gross order value up 27% QoQ/120% YoY). Food delivery business delivered 17% YoY growth in GOV with a steady increase in margins. Adjusted Ebitda as % of GOV margin was up 80 bp QoQ at 4.3%. PAT came in at Rs 590 million (estimate: Rs 2.7 billion), down 57% YoY, primarily attributed to increased investments in accelerated new dark-store openings and customer acquisition efforts in the quick commerce business.
For 9MFY25, revenue/adjusted Ebitda grew 68.5%/5.1x versus 9MFY24. For Q4 FY25, we expect revenue/adjusted Ebitda to grow by 65.8%/70.5% YoY. Our DCF-based valuation of Rs 270 implies a 13% upside from the current price. We reiterate our Buy rating on the stock
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