Zomato Stock Buy or Avoid

Brief Introduction of Zomato Company:

Zomato is one of the India’s leading company in online food delivery across India.  Zomato is one of the favorite name when it comes to order online.  Food could be ordered very easily through App.

Financials Of Zomato Company:

Zomato company is having a market capitalisation of Rs 50,144 Crores. It has made a high of rupees 168 and low of Rs 63.7 in 52 week i.e. 1 year. Zomato is trading at a Book value of Rs 21. It has not given any kind of dividend till date. ROCE [return on capital employed] is of -11.9 %. ROE [return on equity] is of -12.3%. Face value of Zomato share is Rupees 1.

Analysis of Financials Of Zomato Company:

I would like to remind you that on listing Date Zomato has made an achievement of market capitalisation of rupees 1 Lakh Crore simply becoming large cap on that particular listing date. As on 6th May 2022 Zomato company market capitalisation is reduced to Rs 50000 Crores. So we could say 50% of the market capitalisation money has been wiped out from the market. ROCE [ return on capital employed] is generating a negative return of -11.9% which is an alarming thing. ROE [Return Of Equity] is -12.3% which is very dangerous. The main thing of the whole story is that company is generating a negative profit that is loss.

Although Zomato company is able to generate sales in an increasing fashion in every quarter basis. But company is not able to generate profit in in terms of of operating profit, profit before tax, net profit.

My Recommendation on Zomato Company:  

I would not suggest to buy Zomato company shares at this moment as the company is loss making and not able to generate any kind of profit. Any investor invest in the company by looking into its future and if we see try to see what is happening with the company is that from the last several quarter company not able to generate any kind of profit that is the main concern behind investing. I would not invest in this type of company where company is not able to generate any kind of profit. So in my opinion simply avoid buying the shares of Zomato company.


Disclaimer: Before Investing in any stock you must consult with your Financial Advisor, this is just my view.

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