EUR 120.00 For Business Accounts Only

MOSL: INFO-EDGE (Neutral)-High growth and higher burn but the losses per delivery coming down

Info-Edge: High growth and higher burn but the losses per delivery coming down

(INFOE IN, Mkt Cap USD3.2b, CMP INR1849, TP INR1800, 3% Downside, Neutral)

 

Zomato has published highlights of its FY19 financial performance with details around its expansion and outlook.  Appended below are the key highlights, our thoughts and detailed takeaways from the announcement: 

• Zomato’s revenue increased 200% YoY to USD206m in FY19, exceeding its own target of USD180m for the year.
• Revenue from the food delivery business jumped ~4x from USD38m in FY18 to USD155m in FY19 (this excludes the discounts offered). The current run-rate in Mar’19 is ~USD300m.
• Costs increased ~6x from USD80m in FY18 to USD500m.
• Annualized GMV stands at INR1.5b, and annualized orders as on Mar’19 are at ~400m. This implies an average order size of ~USD3.8 or INR266.
• Unit economics have improved from the previous fiscal – Zomato now loses INR25/delivery compared to INR44/delivery in FY18, as the number of deliveries per rider per hour over this period has gone up to 1.4 from 0.9.
• The company is very clear about not operating in own branded chains of dark kitchens for better margins, and believes that there are far better ways to improve the margin profile of the food delivery business than competing with own partners (restaurant owners).