Deepinder Goyal, founder and CEO of Zomato, has joined the billionaire club, with the food delivery company’s shares continuing their rally on Monday.
Goyal holds a 4.19% stake in Zomato, comprising 369.5 million shares. At Monday’s closing price of Rs 229 apiece (up 2.99% from the previous close), this stake is now valued at approximately Rs 8,465 crore (around $1.1 billion). During the day, Zomato’s stock hit a 52-week high of Rs 232 on the BSE.
Zomato’s market capitalisation at the end of trade was Rs 2.02 trillion. The rise in the stock eprice on Monday followed the company hiking platform fee to Rs 6.
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The 41-year-old Goyal, an IIT Delhi graduate, co-founded FoodieBay.com (later renamed Zomato) whene he was with Bain and Company. With initial funding from Info Edge in 2011, Goyal and his team left their jobs to focus on growing Zomato, which rapidly ascended to unicorn status by 2018.
Zomato’s recent performance is largely attributed to its quick commerce business Blinkit, which is outpacing competitors like Swiggy Instamart and Zepto. Acquired by Zomato in 2022 for $568 million, Blinkit is now considered the most valuable asset in Zomato’s portfolio.
Analysts expect Blinkit to surpass Zomato’s core food delivery business in gross order value (GOV) sooner than anticipated. A recent Goldman Sachs note values Blinkit at $13 billion, up from $2 billion in March 2023, above Zomato’s core food delivery business. It predicts Blinkit’s GOV will grow at a 53% CAGR from FY24-27, with both GOV and Ebitda surpassing food delivery by FY29.
While Zomato prioritises growth investments over immediate profitability, analysts expect Blinkit’s path to sustainable adjusted Ebitda margins (4-5% of GOV) may take longer than its food delivery counterpart. However, factors such as advertising income, take-rates, and operational efficiencies are expected to drive gradual profitability improvements.
Zomato’s food delivery Ebitda margin is among the highest globally, and similar results are anticipated for Blinkit.
From: financialexpress
Financial News
