Forwarded from Books - Make India Read
MARKET WIZARD NEWSLETTER ISSUE 18.pdf
1.4 MB
📑 Ⓜ️ARKET WIZARD
🌐 NEWSLETTER ISSUE 18
📊📊 FUNDAMENTAL STOCKS
📍SUNDARAM BRAKES LINING LTD
📍ALEMBIC PHARMACEUTICALS LTD
📍 BOMBAY BUMRAH TRADING CORPORATION - SPECIAL PICK
📍 VOLTAS LIMITED
📈📉 TECHNICAL STOCKS
📍ASIAN HOTELS EAST
📍 CEREBRA INTEGRATED TECHNOLOGIES LIMITED
📍 ESSAR SHIPPING LTD
📍 GANESH HOUSING CORPORATION LIMITED
📍JINDAL WORLDWIDE LTD
🎯 TEAM MARKET WIZARD
🌐 NEWSLETTER ISSUE 18
📊📊 FUNDAMENTAL STOCKS
📍SUNDARAM BRAKES LINING LTD
📍ALEMBIC PHARMACEUTICALS LTD
📍 BOMBAY BUMRAH TRADING CORPORATION - SPECIAL PICK
📍 VOLTAS LIMITED
📈📉 TECHNICAL STOCKS
📍ASIAN HOTELS EAST
📍 CEREBRA INTEGRATED TECHNOLOGIES LIMITED
📍 ESSAR SHIPPING LTD
📍 GANESH HOUSING CORPORATION LIMITED
📍JINDAL WORLDWIDE LTD
🎯 TEAM MARKET WIZARD
Market Wizard
FREE FINANCIAL EDUCATIONAL TELEGRAM CHANNEL
Disclaimer : This channel DOES NOT provide any stock market related advice or recommendation
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
https://t.me/marketswizard
FREE FINANCIAL EDUCATIONAL TELEGRAM CHANNEL
Disclaimer : This channel DOES NOT provide any stock market related advice or recommendation
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
https://t.me/marketswizard
Telegram
Market Wizard
FREE FINANCIAL EDUCATIONAL CHANNEL
Disclaimer : We are not SEBI Registered. Please consult your financial advisor before investing.
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
Disclaimer : We are not SEBI Registered. Please consult your financial advisor before investing.
All the posts appearing in the channel are only for educational and informational purposes.
ALL RIGHTS RESERVED!!!
While IPOs have been hot all of last year, no IPO has generated a buzz like Zomato. While the increased demand, improved metrics in FY21 are discussed, the question remains on the high valuation ask. We did some number crunching on what the expected Market cap implies:
The IPO price band of Rs 72-76 implies market cap of Rs 55,000-60,000 crores!
When the market is fully mature, it can trade at 25x MCap/EBITDA (looking at global peers), implying an annual EBITDA expectation of ~Rs 2,500 cr
At an estimated overhead cost of Rs 2,000 cr, it implies Zomato needs to earn contribution profit of Rs 4,500 cr annually at full scale
Contribution margin (CM) per order of Rs 20/ share (generally 5% of average order value – was Rs 16/ order for 4QFY21)
At Rs 20 CM per order, Zomato will need 225 cr orders to generate that EBITDA (for reference they have done 40 cr orders in their best year FY20)
Assuming 40% market share for Zomato (competition from Swiggy and restaurants having their own delivery set-ups now), it implies 560 cr food delivery orders per year across India
This means 11 crores households (out of total 25 crores) or 45% of the country will need to order once a week to reach this number!
The IPO price band of Rs 72-76 implies market cap of Rs 55,000-60,000 crores!
When the market is fully mature, it can trade at 25x MCap/EBITDA (looking at global peers), implying an annual EBITDA expectation of ~Rs 2,500 cr
At an estimated overhead cost of Rs 2,000 cr, it implies Zomato needs to earn contribution profit of Rs 4,500 cr annually at full scale
Contribution margin (CM) per order of Rs 20/ share (generally 5% of average order value – was Rs 16/ order for 4QFY21)
At Rs 20 CM per order, Zomato will need 225 cr orders to generate that EBITDA (for reference they have done 40 cr orders in their best year FY20)
Assuming 40% market share for Zomato (competition from Swiggy and restaurants having their own delivery set-ups now), it implies 560 cr food delivery orders per year across India
This means 11 crores households (out of total 25 crores) or 45% of the country will need to order once a week to reach this number!
Zomato’s IPO valuation of 4X GMV and 25X Revenues for FY22E is significantly higher than:
Delivery Hero, a leader in over 35 of the 40 emerging markets, is at <1X GMV and 7X Revenues
Meituan, China’s largest FoodTech (~65% share) is at 1.5X GMV and 6X Sales
Doordash, US’s largest player, is at 1.5X GMV and 14X Sales.
Delivery Hero, a leader in over 35 of the 40 emerging markets, is at <1X GMV and 7X Revenues
Meituan, China’s largest FoodTech (~65% share) is at 1.5X GMV and 6X Sales
Doordash, US’s largest player, is at 1.5X GMV and 14X Sales.