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Zomato’s Valuation Surpasses Combined Worth of Dominos, McDonald’s, KFC, and Pizza Hut in India

by Nick
Fast Food

Zomato Surpasses Combined Value of Dominos, McDonalds, KFC, Pizza Hut, and Cafe Coffee Day in India

Zomato, originally known for listing restaurant menus on its platform, has now outpaced some of India’s largest restaurant chains in terms of valuation.

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With its shares currently trading at Rs. 160 per share, Zomato’s market capitalization stands at Rs. 1.39 lakh crore. This staggering valuation surpasses the collective worth of several renowned food brands in India, including McDonald’s operated by Westlife Foodworld, valued at Rs. 11,500 crore; Jubilant Foodworks, which owns Dominos, Dunkin Donuts, and Popeyes, valued at Rs. 29,000 crore; and Devyani International, the operator of KFC, Pizza Hut, and Costa Coffee in India, valued at Rs. 18,500 crore. Together, these established brands amount to a mere Rs. 59,000 crore, less than half of Zomato’s valuation.

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This remarkable achievement comes after a significant uptick in Zomato’s stock price from Rs. 40 per share to Rs. 160 per share. Factors contributing to Zomato’s surge include its recent attainment of its first-ever profit and the growth of its subsidiary, Blinkit.

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Several reasons underpin Zomato’s elevated valuation compared to traditional food companies. Firstly, Zomato is perceived as a tech platform and commands a higher valuation multiple. Additionally, its platform-based model shields it from company-specific risks faced by traditional food brands. While competition among food brands is intense, Zomato primarily contends with Swiggy, making it less vulnerable to disruption. Moreover, as a relatively newer player, Zomato is seen as having greater growth potential than its counterparts in the food industry.

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However, questions linger about Zomato’s lofty valuation. The Indian food delivery market is reaching saturation, posing challenges to sustained growth. Furthermore, Zomato’s profitability could be impacted as it reduces discounts and promotions to bolster profits. Additionally, while Blinkit exhibits rapid growth, profitability in the quick commerce segment remains elusive.

Nevertheless, Zomato, established 15 years ago, has carved out a niche for itself, surpassing the combined value of prominent global food brands in India.

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