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Zomato Q2 Review - Treading The Info Edge Path: ICICI Securities

Zomato Q2 Review - Treading The Info Edge Path: ICICI Securities

<div class="paragraphs"><p>A Zomato Ltd. delivery rider. (Photographer: Dhiraj Singh/Bloomberg)</p></div>
A Zomato Ltd. delivery rider. (Photographer: Dhiraj Singh/Bloomberg)

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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 value (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,

  1. increase in delivery cost (Rs 5 / order or Rs 0.73 billion, versus Q1 FY22),

  2. growing share of cities outside top-20 and

  3. higher employee stock ownership plan expenses led to Rs 1.6 billion higher Ebitda loss versus the previous quarter.

Click on the attachment to read the full report:

ICICI Securities Zomato Q2FY22 Results Update.pdf

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