Zomato's Hungry Zoom Into Sensex Has High Growth Recipe

I don't recall ever seeing Deepinder Goyal without a smile. That must be a tribute to someone who runs a very serious business, and perhaps also a recognition that the co-founder and CEO of food delivery giant Zomato knows a big trick from Silicon Valley: a high-profile founder who is sort of likeable is a talent magnet and boosts the corporate brand he represents.As Zomato enters the official big league of India's corporate sector, the 30-share Bombay Sensitive Index, it is dubbed India's first new-age company to enter the Sensex.I would like to quibble on that because new age is a relative term. Software services firm Infosys was new age a couple of decades ago and so was IT educator NIIT Ltd, both of whom have figured in the prestigious index in a game of stock market snakes and ladders. But I would not argue over the fact that Zomato's surge has been phenomenal, ambitious and above all, with a minimum of what I would call the controversy-to-fame ratio.Zomato CEO is Tapping Into an Amalgam of the Youth's Aspiration and DesperationZomato shares, which rose seven percent on Tuesday following news of its Sensex entry, have thumpingly outperformed the index in a year, jumping 130 percent against the benchmark. Its net profit of Rs 172 crore in the latest quarter shows that it has not suffered from the disease called premature listing, under which many a unicorn (billion-dollar startup) trembles, because the need to get listed overpowers the patient pursuit of the bottom line.Zomato's market capitalisation, at a convincing Rs 2,40,000 crore, stands way above rival Swiggy's Rs 99,000-odd-crore and miles above the once-fancied financial tech player PayTM's (One97 Communications) Rs 56,000 crore, and beauty and wellness brand Nykaa's (FSN E-commerce Ventures) Rs 47,600 crore.Unless you have been sleeping under a rock, you may have noticed that Deepinder Goyal has been on Netflix this month on the hugely popular The Great Indian Kapil Show with Infosys co-founder Narayana Murthy, sharing stories of how he met his Mexican yoga teacher wife Grecia turned Gia. More recently he was buzzing on LinkedIn as he advertised for a chief of staff who once selected will not receive a salary for the first year and would instead be required to donate Rs 20 lakh to Feeding India, Zomato’s non-profit arm.Such elegant PR that attracts attention, for better or for worse, is the stuff Goyal is good at. When you sound like a consumer brand yourself, it helps that you run a popular food-related brand.Yet, Goyal's smiling face hides a hard-as-nuts business brain that has helped him do this market pole vault. Somewhere along Zomato's surge, fellow Indian unicorn Flipkart lost its domestic identity as it got acquired by US-based retail giant Walmart.My mind goes back to a Saturday afternoon nearly a decade ago when I met Goyal at his Gurugram office just across the Millennium City's Gold Souk. He had a small cubicle but not his energetic staff, most of whom were buzzing in an open-plan floor that looked like a college cafeteria. I announced to the world then that Zomato was an unlikely blend of a startup and a multinational because it was, at the time, present in 22 countries.The global reach has since seen ups and downs but its indication of Zomato as an ambitious player has not. For the record, born as FoodieBay in 2008, Zomato is still a corporate teenager.“There are no boundaries anymore,” Goyal had told me then. That was an audacious statement for the son of a schoolteacher couple hailing from a speck called Muktsar in Punjab which has a population of less than one million people.Venture capitalists like that kind of ambition, and IIT-Delhi-educated Goyal who turned 41 last Republic Day, fed their ambition alongside his. Zomato has made a series of acquisitions that include the Indian food-delivery unit of Uber, a firm called Urbanspoon in North America, and more recently, the quick-commerce firm Blinkit.Zomato Row: In A Caste-Coded Society, The Politics Of Who Touches Your FoodPrior to its July 2021 listing, Zomato, co-founded by Goyal with Pankaj Chaddah, had raised a total funding of $1.69 billion spread over 18 rounds.As of last year, Zomato had more than 3,50,000 average monthly "delivery partners" - a fancy title applied to the men, women, boys, and girls who wear the company's trademark red T-shirt that would remind one of red chillis or tomato ketchup. Their reach extends to more than 800 cities.Blinkit is Zomato's new growth powerhouse and its gross order value (GOV) was growing at 122 percent year-on-year as of last quarter, outperforming its food delivery growth of 21 percent. Look hard, and it could be biting at Amazon's heels. About 2,000 "dark stores" are planned by 2006, up from the current count of about 650. That kind of explains the Sensex sex appeal of the stock. Goyal's personal net worth is now estimated at $1.7 billion.The ride to the Sensex has not been without hiccups. These include a tug-of-war with restaurant owners in its earlier days when they found that Zomato's discounts intended to boost customer volumes were eating into their own profits and exclusive image.There were also flareups involving a customer who cancelled a delivery person in a case of religious discrimination, an abandoned "pure veg" green-branded delivery fleet that smelt of bigotry for many, and an inter-city delivery service that flopped like a badly made Bollywood movie.Yet, none of these has dented Zomato's profit run or even its image. If anything, you could call them naughty PR tricks that Goyal may have been hiding behind his ever-smiling face.Stock market analysts are, as ever, arguing about Zomato's valuation and share price, which has a price-to-earnings ratio of more than 330. That number is more about a future growth promise than past performance, as it typically happens in new-age companies. Stock market fortunes may waver, but what appears more steady is Zomato's growth hunger, which seems to match that of its customers ordering food on its app.(The writer is a senior journalist and commentator who has worked for Reuters, Economic Times, Business Standard, and Hindustan Times. He can be reached on Twitter @madversity. This is an opinion article and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)Zomato Plans To Deliver Food in 10 Minutes, but Should We Be Excited?

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Zomato's Hungry Zoom Into Sensex Has High Growth Recipe

Zomato's market capitalisation, at around Rs 2,40,000 crore, stands way above rival Swiggy's Rs 1,00,000-odd-crore.

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