Company Based Research On

On

(Parental Company – Info Edge)

Submitted by:
Nishant Soni
Roll: 20459 (Theta)
In Partial Fulfilment for the award of degree
Postgraduate Diploma in Management
Batch: 2020 – 2022
Specialization: _______________ and ________________

New Delhi Institute of Management

50 (B&C), 60, Tughlakabad Institutional Area, New Delhi-110062
E-mail: placement@ndimdelhi.org Website: www.ndimdelhi.org

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 Introduction
Zomato is an Indian restaurant aggregator and food delivery initiative initiated by Deepinder
Goyal and Pankaj Chaddah in 2008. Zomato provides details, menus and user reviews of
restaurants and food delivery options from partner restaurants in selected cities. Zomato also
started the delivery of food with the advent of COVID-19. As of 2019, the service is available
in 24 countries and more than 10,000 other cities. Zomato was formed as Foodiebay in year
2008, and fixed as Zomato on January 18, 2010 as Zomato Media Pvt. Ltd. In 2011, Zomato
spread across India to Delhi NCR, Mumbai, Bangalore, Chennai, Pune and Kolkata. Business
expanded in United Arab Emirates, Sri Lanka, Qatar the United Kingdom, the Philippines
and South Africa in year 2012. And in New Zealand, Turkey, Brazil and Indonesia, with its
website and applications available in Turkish, Portuguese, Indonesian and English in the year
2013. In April 2014, again expanded its operation in Portugal, followed by launches in
Canada, Lebanon and Ireland in 2015. In 2019, Zomato acquired a spoonful of food based in
Seattle, which led to the company's entry into the United States and Australia. With the
launch of. xxx domains in 2011, Zomato also launched zomato.xxx, a site dedicated to food
porn. In May 2012, it launched a printed version of the website called "Citibank Zomato
Restaurant Guide," in partnership with Citibank, but it has been phased out. Zomato has also
made a name for itself with its digital marketing expertise. In February 2017, Zomato
announced plans to launch the services of Zomato Infrastructure, a service to help restaurants
increase their presence without incurring certain costs. In September 2017, Zomato said the
company had "turned to making a profit" in all 24 countries where it operated and introduced
a "zero-commission model" of partner restaurants. Towards the end of 2017, Zomato stopped
receiving updates from its non-presidential users to verify and update them. App users have
reported problems with new order payment features. Zomato reduced its losses by 34% to 9
389 crore in the 2016-17 financial year, from ₹ 590.1 crore last year 2015-16. In September
2019, Zomato fired about 10% of its staff (540 people) who are responsible for performing
back-end operations such as customer service, vendor and delivery support services. In April
2020, due to an increase in demand for online food during the COVID-19 epidemic, Zomato
launched its Zomato Market food delivery services in 80+ cities across India. In April 2020,
Zomato introduced Contactless Dining to prepare for land closure. In this step, the company
aims to reduce customer contact and anything else that someone else may have touched on,
by eliminating the use of more sensitive items such as menus, ordering, and billing through
bar codes or an app while employees wear masks. In May 2020, Zomato retrenched 520
workers as a result of the COVID-19 epidemic. Apart from the fact that the demand for food
delivery services in restaurants and bars has increased, Zomato's reason for deciding that he
needs to cut short is that coronavirus will be followed by economic downturns, which could
affect orders. In August 2020, Zomato recommended the introduction of a temporary leave
policy, allowing female employees to take up to 10 days a year if they are unable to work due
to the health effects of the menstrual cycle. The policy also applies to transgender employees.

Investments
Zomato's Food Delivery App saved about US $ 16.7 million in Info Edge India, giving Info
Edge India a 57.9% stake in Zomato between 2010 and 2013. In 2013, Zomato withdrew
another US $ 37 million from Sequoia Capital and Info Edge India. In November 2014,
Zomato completed another US $ 60 million grant with a backlog of US $ 660 million. . While
in April 2015, Info Edge India, Vy Capital and Sequoia Capital earned another US $ 50
million. Another $ 60 million was taken from Temasek, a Singaporean state-owned

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investment company, and Vy Capital in September. In October 2018, Zomato raised $ 210
million in Alibaba's company that paid to Ant Financial. Ant Financial acquired a 10% stake
in the company as part of the round, costing Zomato about $ 2 billion. Zomato also raised an
additional $ 150 million to Ant Financial in early 2018. In September 2020, Zomato raised $
62 million at Temasek, after a capitol that had previously committed to Ant Financial never
materialized. In October 2020, as part of a grant for Series J, Zomato raised $ 52 million from
Kora, a US-based investment company.

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 Company Background

Board of Directors

Deepinder Goyal is the Founder & CEO of Zomato. He leads

product development along with overseeing strategy and
leading business expansion.

Gaurav Gupta is the Founder and COO. He has been with

Zomato for four years now and is a part of the core leadership
team driving growth and transformation in Zomato.

Mohit Gupta is the CEO – Food Delivery Business at Zomato.

He has recently joined in Zomato’s long-term vision – ‘better
food more people’ – and is leading the overall business
endeavours for food delivery segment at Zomato

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Gunjan Patidar is the Head of Engineering at Zomato. He
has been a part of the company’s journey since 2008 and
has been building Zomato’s Technology since day 1.

Akriti Chopra is the CFO at Zomato and has been with

the organisation for close to eight years. She started her
journey with Zomato in the Finance team where she was
responsible for setting up and scaling finance processes
for Zomato’s global operations.

Daminee Sawhney is the Vice President, Human

Resources at Zomato. She has been with Zomato for over
seven years now and has played a key role in building
Zomato’s workforce.

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Comparative Analysis

Non-Current Assets: Non-current assets include property, intangible assets,

investments worth of INR 13841 Crores. We can see a increase in total share
capital of 4222 Crores which leads to increase of 30.50%.
Current Assets: current assets include trade receivables, bank balance, other
financial assets worth of INR 15568 Crores. We can see a decrease in of 2522
Crores which leads to decrease of 18.22%.
Total Equity: Equity include equity share capital worth of INR 23239 Crores.
We can see a increase in of 1077 Crores which leads to decrease of 4.63%.
Non-Current Liabilities: Non-Current liabilities include borrowings, trade
payables etc. capital worth of INR 46 Crores. We can see a increase in of 522
Crores which leads to increase of 1134.78%.
Current Liabilities: Current liabilities include financial liability, lease liability
etc. capital worth of INR 6124 Crores. We can see a increase in of 100 Crores
which leads to increase of 1.63%.

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Zomato Profit & Loss Account

Net Sales: The Net Revenue from Operations of Zomato saw an increase of
1744 Crores, which is an increase of about 15.88%
Total Revenue: The Total revenue of Zomato saw an increase of 1509 Crores,
which is an increase of about 12.47%
Total Expenses: The Total Expenses of Zomato includes Operating and Direct
Expenses, Employee Benefit Expenses, Finance Costs, Depreciation and
Amortization Expenses and Other Expenses. It collectively saw an increase of
1,407 Crores which is an increase of about 18.10%.
Profits: Profits before Exceptional Items & Tax saw a increase of 102 Crores,
which is a increase by about 2.36%. By adding Exceptional Items, the resulting
Profit Before Tax decreased by 898 Crores, indicating a increase of 268.86%.
Exceptional Items: Exceptional Items include Dividends & Interests paid out
by infor edge. We can see a increase in it by 898 Crores, which is a increase of
268.8622%.
Total Tax Expenses: Total Tax Expenses declined by 36 Crores as a result of
lesser PBIT/EBIT, which indicates a decline of -3.07%.

The Profit/Loss for the financial year 2019-20 significantly declined by 786
Crores, which is about 28.13% lesser than the previous year.

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Vertical Analysis

Balance sheet Item

Vertical Analysis Formula( Balance   sheet)= *100
Total assets∨liabilities

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Profit & Loss Account
P∧L Item
Vertical Analysis Formula (Profit & loss) = Net Sales *100

Vertical Analysis is also called as ‘Common Size Analysis’. Here all the items
in a Profit & Loss Statement are stated as a percentage of Net Sales, and all the
items in the Balance Sheet are stated as the percentage of Total Asset/Liability.

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CAGR Analysis

Compound Annual Growth Rate refers to annual growth rate of investment over
a period of time. It can be calculated in terms of sales growth rate and profit
growth rate. Using the formula given below:

CAGR for sales & profit is calculated as:

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Info Edge revenues have grown at 16% CAGR over the past five years.
Excluding the special undisclosed business, which was divested in FY17,
revenues grew at 12.64% CAGR over the same period which means that the
company has improved & is doing pretty well in terms of sales or profits right
now

Financial Ratios

Financial ratios are relationships determined from a company's financial information and used for
comparison purposes. They tell us the financial position of the company at that particular point of
time.

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Liquidity Ratios
1. Current ratio
Current ratio is the relationship between current assets and current liabilities. It
is calculated by dividing current assets buy current liabilities. In this case,
Current assets= 102.80 Cr. and current liabilities= 25.20 Cr. Hence, the current
ratio becomes 4.03 which is way more than the ideal limit (1.2-2).

2. Quick ratio
Quick Ratio tells us the relationship between liquid assets and current liabilities.
Liquid assets can be calculated as current assets less closing inventory and
prepaid expenses and quick ratio can then be calculated as liquid assets divided
by current liabilities.

Efficiency Ratios
1. Fixed asset turnover ratio
Fixed asset ratio shows the relationship between cost of goods sold or net sales
and net assets employed by the business. It is calculated as COGS or net sales
divided by net fixed assets which for the info edge for the current year is 7.28.
Compared to 6.5 for 2018-19 and 5.6 for the year 2017-18. The ratio for this
year increased significantly stating efficient utilization of assets and compared
to its competitors, as we can see in the table above the ratio for info edge is the
highest.
2. Net working capital ratio
Net working capital ratio establishes the relationship between COGS or net
sales and Net working capital. It is calculated by COGS or net sales divided by
working capital which is current assets – current liabilities. The ratio for this
company is -9.25 which means the working capital can be utilized more
efficiently, there is scope for improvement. Compared to 0.9 for 2018-19 and
0.8 for 2017-18, the ratio for the current year has declined severely and
compared to its competitor’s times group has the least net working capital ratio
evident form the above table.
3. Inventory turnover ratio
This ratio tells us the no. of times inventory is converted into revenue from
operations during tan accounting period. It is calculated by cogs divided by
average inventory. Average inventory for the period is 4599 Cr. Hence, the ratio

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becomes 1.52 which compared to 2.06 in 2018-19 and 2.54 in 2017-28 has
reduced stating that the restocking period for the company has increased which
is obvious stating the fact that in covid times the lockdown has increased the
viewership excessively. Compared to its competitors 2.55 for tv18 and 2.63 of
times group the ratio for info edge is pretty less which means it has been more
popular with the people during the pandemic.

Solvency Ratios
1. Debt- equity ratio
Debt equity ratio is used to evaluate financial leverage of the company. The
degree to which a company finances its operations through debt to wholly
owned shares is measured here. It is calculated by dividing total liabilities by
shareholder’s equity. The ratio for info edge is 0.01 which is the least among
0.48 for times group
2. Debt to total fund ratio
Debt to total fund ratio calculates the relationship between long term debts and
long-term funds which include long term debts and shareholder’s funds. The
ratio for the company is 4.25 which is lowest in comparison with 12.11 in 2018-
19 and 13.29 in 2017-18. Compared to its competitors, it has a lower debt to
equity ratio form linkedin but greater than times group.
3. Proprietary ratio
This ratio shows the relationship between proprietor’s funds and total assets. It
tells us exactly to which extent assets are financed by proprietor’s funds. The
ratio for info edge is 0.77 which is 0.4 higher than the ideal ratio and it means
that the proprietor made 0.7% investment into info edge’s assets. Compared to
0.75 for 2018-19 and 0.78 for 2017-18, the ratio has a stable pace in growth.

Profitability Ratios
1. Net profit ratio
Net profit ratio is of the most significance to the shareholder and workers of the
company because shareholders’ get dividend from net profits of the company. It
is calculated by net profit divided by net sales into 100. Net profit ratio for our
company is ((7984.70/7219) *100) 6.48% which has decreased significantly
from 19.72 in 2018-19 and 22.08 in 2017-18. Compared to its competitors, Info
edge has the least net profit ratio.
2. Interest coverage ratio

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This ratio establishes the relationship among net profit before tax and interest
and annual amount of interest payable. This ratio is calculated as Net profit
before interest & tax divided by interest on loan & debentures. For info edge,
interest coverage ratio is 9.58 which is lowest in comparison to 19.82 in 2018-
19 and 16.08 in 2017-18. Among its competitors, Info edge’s ratio is lower than
that of times group but greater than linkedin
3. Operating profit ratio
Operating profit ratio is more significant than net profit ratio and is calculated
by adding back non-operating expenses & losses to the figure of net profit and
deducting non-operating income and gains. (operating profit/net sales) *100 is
the formula to calculate it. For info edge, the ratio is (1576/7219*100) 21.83%
which is lower than 39% in 2018-19 and 35% in 2017-18.
4. Return on capital employed
This ratio shows the relationship between net profit before interest, tax and
dividend (preference) and capital employed. Also known as return on
investment, this ratio for info edge is (1243/ 210.80*100) 14.09 which is lower
than 26.32 in 2018-19 and 25.83 in 2017-18.
5. Earnings per share (EPS)
This ratio is calculated by dividing the net profit before interest, tax, and
dividend by the no. of equity shares. For info edge, the ratio Is 5.48 which is
lowest in 3 years (16.32- 2018-19 & 15.4- 2017-18)

Cost & Profit Centers

As we can see form the pie

chart above, most of the
revenues of the company
come from recruitment
(230.6%). So, the profit center
of the company would by
recruitment since it comes at
minimum cost and profits are
maximum from this source.

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Break-even point

Break-even point is a point of No profit No Loss for the company. It can be

calculated as:

¿ cost
Break even point=
PV Ratio

change ∈ profit
PV Ratio=
change∈ sales
*100

1655−748
7192.80−6851.40
=*100

PV Ratio for the period is 325, hence the break-even point becomes 173.17 Cr.
Which means the company need to sell its product/service worth 173.17 Cr. to
reach its break-even point.

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