Zomato food business performance largely in line; Blinkit profitability a big silver lining: Karan Taurani
Karan Taurani, Senior VP, Elara Securities, says on profitability, Zomato has maintained 2.5% kind of a range. They have been guiding for 4% to 5% EBITDA as a percentage of GOV. They are very much well on track for that. In the last two quarters, we saw significant improvement in EBITDA as a percentage of GOV. But, of course, that kind of momentum may not happen in every quarter. So, it has come to a more of a steady state or a phased manner. ”
What do you make of the commentary? Is this a bit more muted or the management is being a bit more conservative, you believe?
If you look at the growth numbers, it is largely in line, 20% growth on GOV is a mild positive surprise on the food business on a YoY basis. The adjusted revenue has grown 22%, so that positive surprise has been offset by this, clearly because generally what happens is the outperformance of the adjusted revenue is somewhere close to 1.2 to 1.3 times in terms of growth versus the GOV growth, so that is one.
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Offering CollegeCourseWebsiteIIM KozhikodeIIMK Chief Product Officer ProgrammeVisitIndian School of BusinessISB Chief Technology OfficerVisitIIM LucknowIIML Chief Executive Officer ProgrammeVisitSecondly, on profitability, they have maintained that 2.5% kind of a range. They have been guiding for 4% to 5% EBITDA as a percentage of GOV. They are very much well on track for that. In the last two quarters, we saw significant improvement in EBITDA as a percentage of GOV. But, of course, that kind of momentum may not happen in every quarter. So, it has come to a more of a steady state or a phased manner.
Third, a very big positive is the Blinkit business wherein the contribution margins have turned
