Zomato

Exhibit 11: Zomato’s opportunity set is limited to serving the restaurant ecosystem or leveraging delivery capabilities.
Other adjacencies that typically Meituan or Grab have captured might either not be available or not a strategic fit
Businesses Meituan DoorDash Deliveroo Grab Swiggy Zomato Zomato positioning and outlook
Current businesses
Food Delivery       Will stay dominant for foreseeable future
Advertising/online marketing       Could be a recovery play to target dine-in revenues
Membership subscription       Think will be a highly profitable revenue stream
Restaurant supplies       Can help build fresh supplies sourcing for grocery
Table Reservation       Largest player in India but currently not monetized
International operations       Pullback from most markets, currently 9% of revenue
Adjacencies possible
Grocery Delivery       Pullback from own grocery, focus on Grofers
Pick up and drop services       No immediate plans on this from Zomato
Payments/cards/lending       Will offer BNPL & expand to financing over time
Adjacencies unlikely
Bike Sharing/ Ride Hailing       Ola/Uber are entrenched no space for another player
Cloud Kitchen       Tried & pulled back, unlikely to relaunch
OTA       OTA market is already consolidated and taken
Movie & show tickets       Bookmyshow/PayTM dominant no space for 3rd player
Source: Company, Ambit Capital Research

Exhibit 12: Grocery market will be a tough nut to crack Exhibit 13: Case for profitability is yet to be established
given high competitive intensity for online grocers given thin gross margins/smaller scale
Comparison Dmart Spencers Bigbasket
%
FY21 Revenue (` bn) 247 26 38
PBT (` bn) 17.9 -0.4 -6.1
Others, 20
Revenue 100.0% 100.0% 100.0%
BigBasket, COGS 85.2% 78.5% 91.9%
37 Gross profit 14.8% 21.5% 8.1%
JioMart, 4
Employee cost 3.9% 7.2% 9.3%
Rent 0.3% 3.2% 0.3%
Flipkart,
11 Ad spends 0.0% 1.9% 3.9%
Other expenses 2.3% 9.1% 8.2%
Grofers, Amazon, EBITDA 8.3% 0.0% -13.7%
13 15 EBIT 7.3% -1.8% -16.1%
Source: PGA labs, Ambit Capital research Source: Aceequity, Company, Ambit Capital research

Exhibit 14: Zomato trades at significant premium to global peers even on FY24E EV/sales and implies 26.3% revenue CAGR
over FY21-40E with avg. EBIT of ~23% suggesting benefit of doubt on optionality and profitability is being already given

80 Delivery Hero
Sales CAGR (FY21-24E)

60 Zomato
Just Eat Takeaway
Meituan
Doordash
40 Deliveroo

Jubilant Foodworks
HelloFresh
20
0

10

12

14

16

EV/Sales (x) - FY24E

Source: Bloomberg, Company, Ambit Capital research. Note: Bubble size represents FY24/CY23E revenue in USDmn.

September 29, 2021 Ambit Capital Pvt. Ltd. Page 4