Good to Exit from Zomato Share? ✅ ❌ | Detailed Analysis & Long Term Investment | Harsh Goela

Summary

The video script offers an in-depth analysis of the food delivery business, comparing the performance in the US and India. It highlights differences in customer expectations, order values, and the impact of labor laws and government regulations. The script also discusses the importance of customer experience, delivery partners, and restaurant partnerships for the success of food delivery platforms. Furthermore, it touches on the challenges and opportunities in the quick commerce sector, emphasizing the growth potential and competitive landscape of companies like Zomato and its rivals.

Takeaways

• 📈 The food delivery business in the US outperforms India due to higher order values and a major audience that is more accepting of new technologies.
• 🌏 In India, the food delivery market faces challenges like lower order values and higher marketing costs to attract a market that is comparatively less accustomed to such services.
• 🚴‍♂️ Labor laws in the US are strict, whereas in India, they are more lenient, providing a competitive advantage for food delivery businesses in terms of operational costs.
• 🏢 Government regulations in the US are stringent, which might not be favorable for businesses, unlike in India where regulations are minimal, benefiting the food delivery sector.
• 🤔 The speaker is not a financial advisor and is sharing personal research and experiences, urging viewers to do their own research before making investment decisions.
• 📊 There is a significant growth in the food delivery business in India, with a jump from 275 crores to 313 crores, indicating a positive trend.
• 📱 The importance of customer experience, delivery partners, and restaurant partnerships are highlighted as the three pillars for the success of food delivery platforms.
• 📈 The urbanization in India is expected to increase the use of food delivery platforms, with the urban population projected to be counted in the 42-43 crore range by 2030.
• 💡 The script suggests that the food delivery business in India has a lot of untapped potential, especially with the rise of quick commerce and the changing dynamics of consumer behavior.
• 🛑 The speaker mentions the potential risks of government intervention in the future, which could affect the profitability and operational ease of food delivery businesses.
• 📉 The script discusses the decrease in the company's EBITDA margin from 7.5 to 7.3, which might be a concern for investors looking at profitability.

Q & A

What is the main topic discussed in the video script?

The main topic discussed in the video script is the food delivery business, its performance in the US and India, the differences between the two markets, and the factors contributing to the success of food delivery platforms.

What are the three important pillars for the food delivery business mentioned in the script?

The three important pillars for the food delivery business mentioned in the script are customers, delivery partners, and restaurants.

What is the difference between the customer audience in the US and India according to the script?

The script mentions that the customer audience in the US is a major audience, while in India, it is an emerging audience, indicating a difference in the maturity of the food delivery market between the two countries.

How does the script describe the government regulations affecting the food delivery business in the US and India?

The script describes government regulations in the US as extremely strict, while in India, they are minimal and more lenient, suggesting a difference in the regulatory environment that could impact the food delivery business operations.

What is the significance of the term 'Quick Commerce' mentioned in the script?

The term 'Quick Commerce' in the script refers to a business model where goods are delivered to customers within an hour, highlighting a trend towards faster delivery services in the food delivery industry.

What are the challenges faced by delivery partners mentioned in the script?

The script mentions that delivery partners face challenges such as being unskilled labor, requiring only basic skills like knowing how to ride a bike and having a license, and the potential for labor strikes and movements for better benefits.

How does the script discuss the role of restaurants in the food delivery business?

The script discusses the role of restaurants as critical partners in the food delivery business, emphasizing the importance of their profitability and the need for platforms to maintain good relationships with them to ensure quality and service.

What is the potential impact of government intervention on the food delivery business as discussed in the script?

The script suggests that government intervention could lead to additional rules and regulations that might increase costs for the food delivery business, potentially making it more challenging for companies to operate profitably.

How does the script analyze the financial performance of a specific company in the food delivery sector?

The script analyzes the financial performance by looking at the company's adjusted revenue, profit growth, and earnings, highlighting a significant jump in profits and a positive direction for the company's growth.

What is the 'entry barrier' for new companies in the food delivery business mentioned in the script?

The 'entry barrier' mentioned in the script refers to the challenges new companies face when trying to enter the food delivery market, such as the need for significant data, setup work, logistics, and competition from established players like Swiggy and Zomato.

What is the script's perspective on the future of the food delivery business in India?

The script suggests a positive outlook on the future of the food delivery business in India, expecting growth in urbanization and the adoption of food delivery platforms by the population, as well as the potential for the sector to become more organized by 2030.