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ICICI Securities Report
Zomato Ltd.’s Q2 FY22 revenue growth was incredibly strong (up 21% QoQ and 140% YoY) and way higher than our expectations (up 10% QoQ).
Delivery fee (up 25% QoQ) outgrew gross order (up 19% QoQ) by a margin, hinting at a meaningful increase in delivery charges, as we anticipated in our initiation note.
Operationally, Zomato's both supply and demand side metrics reported an impressive increase.
This strength seems to be driven by opportunistic branding and marketing investments focused on driving the return of customer traffic post the second Covid-19 wave.
Besides this,
increase in delivery cost (Rs 5 / order or Rs 0.73 billion, versus Q1 FY22),
growing share of cities outside top-20 and
higher employee stock ownership plan expenses led to Rs 1.6 billion higher Ebitda loss versus the previous quarter.
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