Zomato.. Zomato... A DIY Valuation of Zomato

Рет қаралды 62,291

Күн бұрын

I looked at Zomato a couple of weeks ago, just ahead of its IPO, and valued the company at about ₹40. When the stock opened up for trading at ₹120, I heard from both sides, one arguing that I was attaching too high a value for a company that had never made money and the other positing that I was missing the big market potential and under valuing the company. In this session, rather than push my valuation, I will allow you to tell your own story and derive your own value for the company. (Even if you have never valued a company, I will take care of the mechanics.. all you have to do is tell your story). If you get a chance, please enter enter your numbers in the Google shared spreadsheet, and we will have a crowd valuation of Zomato going...)
Slides: www.stern.nyu.edu/~adamodar/pd...
Blog Post: aswathdamodaran.blogspot.com/...
DIY valuation spreadsheet: www.stern.nyu.edu/~adamodar/pc...
Google shared spreadsheet: docs.google.com/spreadsheets/...

Пікірлер: 128

@keshavamurthy6322 3 жыл бұрын

"I'd rather be transparently wrong, than opaquely right !" - Aswath Damodaran. Great thought about Feedback loop . Thanks Professor.

@hengxiao4290 3 жыл бұрын

IMO, Professor Damodaran is not only a very gifted mind and extraordinary human being for sharing his knowledge. But also one of the most didactic lecturers I've ever had the pleasure of listening to. I look forward to meeting him someday.

@nmns3950 3 жыл бұрын

You are the reason I got into investing...started from square one, still have no idea what to buy, but I know what not to buy.thank you so much professor.. it's great pleasure and honor to listen to you

@adhirajmukherjee8455 3 жыл бұрын

When people question assumptions without understanding the significance of the crystal ball output (MC simulation), there you go, Professor simplifies it for you. Thanks for doing this!

@laxsal12 3 жыл бұрын

This is really *Very kind of you* Professor to prepare a follow up presentation on Zomato based on comments received & for sharing the DIY valuation model

@shreysharma7682 3 жыл бұрын

Sir ji you really are "Dronacharya of valuation" 🙏🙏

@soumyasubhrabhowmik2209 3 жыл бұрын

Thank you so much for this session, Professor. It was fun and insightful!

@riteshmahajan5209 2 жыл бұрын

Though, I haven't understood a lot of what you said in the last half of your analysis, I still loved every bit of what and how you explained it. Since, I have known you, though not much long ago, I have become of fan of you and your lectures which has sense of realism in them and perhaps are the skills which I have always wanted to have. Thanks a lot sir, for being there and available to all of us :) and happy Independence Day to you.

@countryboy4369 3 жыл бұрын

You are legend of valuation sir 🙏

@walkingphilosopher 3 жыл бұрын

I need to let you know I respect you a lot and like your academic approach to investing.

@phalgunarao1 3 жыл бұрын

Clear and data driven view on the valuation of Zomato. Most often we bring emotion and sentiments which really affect this process. Thanks for making it as simple as you have made it.

@Krishnamurthy5111 3 жыл бұрын

Thanks for giving us tools to backup our investment decisions.

@seeker4430 3 жыл бұрын

As always its fascinating to watch your videos Sir. Thanks a lot! I got a few new perspectives to think about.

@Vishu12 2 жыл бұрын

I think this is probably the best video on value investments . I like the idea of keeping things simple!!!

@tarunkapoor 3 жыл бұрын

Thank you prof!

@sergioaguilarzurita3496 2 жыл бұрын

Thank you for sharing all your vast knowledge!!

@omkarrane4469 2 жыл бұрын

I am lucky to be born in this era , every precious thing here is free of cost. That's the beauty of internet. Thank you sir. You are making life's of people's of my age (18) 🤗, who want to learn but can't afford it.

@viveksinghsays 3 жыл бұрын

Good presentation and very simple to understand, I am in that category who thinks it can gained Market share because of growth in Indian market

@zanjeerz937 3 жыл бұрын

Brlliant once again Prof !!! Making it simple !!

@user-so7dn7og5l 2 жыл бұрын

Thank you so much for this session. it was super informative.

@shashankgoudboorgu7921 3 жыл бұрын

Open to all criticism, excellent video as usual.

@JonesDawg 2 жыл бұрын

Thank you Professor for your insights! Greatly appreciated.

@sanjaybhatikar 3 жыл бұрын

It is wonderful what you are doing to raise awareness of fundamentals. You are giving us tools to think for ourselves in financial matters. Grateful for your engagement!

@mks7846 3 жыл бұрын

Excellent Presention Prof

@rishiwarpe 2 жыл бұрын

Interesting dichotomy Mr Professor....Looking forward more insights from you

@sudhanshudata1135 3 жыл бұрын

As always Thank You, Proff.

@financialmaximalist2221 3 жыл бұрын

Prof, FYR Zomato has also recently entered the health and nutrition market - vitamins, proteins etc. Also, thanks for this amazing video!

@kashyapachandra6794 3 жыл бұрын

Thanks for a very valuable video! 💯💯

@AhmadSheikh36 2 жыл бұрын

Thank you professor!

@vitorpicini4822 3 жыл бұрын

Thank you Professor.

@addygunners 3 жыл бұрын

Thank you, Professor.

@senthilsekar620 3 жыл бұрын

Thank you professor.

@joesandusky5434 3 жыл бұрын

Great video as always

@lohitg9975 2 жыл бұрын

Thank you ... As usual great analysis ..

@kinnuarmy 2 жыл бұрын

I could listen this man all day

@tmderizal 2 жыл бұрын

Thank you very much Professor, this video is easy to understand and instructional 👌 Hopefully, you can also provide valuation example of companies from other large emerging markets in the future (like Indonesia for example)

@SUNILPAWAR-gk2qq 2 жыл бұрын

Respected Sir Great Thanks Take Care Regards

@hemanthsamineni4274 3 жыл бұрын

Thanks Prof.

@pushkardeshmukh2413 3 жыл бұрын

Thank you sir.

@soorej.p 2 жыл бұрын

Just one word!.. "Elegant "

@gunaraj6947 Жыл бұрын

Thanks a lot sir for sharing your views

@rahulsharmaoo7 2 жыл бұрын

thank you sir for your knowledge sharing

@ravikumar55555 2 жыл бұрын

Awesome sir!

@adityamodi8922 2 жыл бұрын

drone delivery will be gamechanger for zomato as thier payload is highly suitable for drones.

@vibhors 2 жыл бұрын

Professor , one of founder just took exit before the organisation getting profitable, your valuation hit him harder

@jayaprakashsworldtraveler8726 2 жыл бұрын

Thank you sir

@ivinitmittal 3 жыл бұрын

Please cover Paytm as well before thier IPO!!👍

@Veritas891 2 жыл бұрын

Dr. Damodaran, thank you very much for your educational videos! In your view, do you think an individual investor can reliably outperform a total stock market index fund by using your methods of valuing companies?

@nevinkgeorge 3 жыл бұрын

Waiting for zomato's quarterly numbers to come in and price to plummet :p

@Iamfalconsingh 3 жыл бұрын

Hehehe, it is india they may manipulate certified with Big4 signs, anything is possible here

@rishabhjain7543 3 жыл бұрын

@@Iamfalconsingh No bro. Do not underestimate Sebi, I would say it's way more regulative than even SEC.

@omkar9783 3 жыл бұрын

@@Iamfalconsingh India is far more regulated then wallstreet in a sense that in wallstreet you can short more than free float market cap of a stock (gamestop) which is insane and illogical

@saib7231 3 жыл бұрын

@@rishabhjain7543 they removed all the pro plans and made New proplans this will add up their revenue and makes profits.

@harshking1151 3 жыл бұрын

Zomatos number out yesterday and result is bad but still price went up ...Hahahaha totally operator gaming in this stock

@shekaricricketer 2 жыл бұрын

The big plus for Zomato at the moment is they have large base & coverage compared to Swiggy and others!!! they can dominate at least for another couple of years and also take advantage of this Pandemic!! Once Amazon or other E Commerce which already have better network enters things might change rapidly so as Mr.Damodhar mention at the end if you know to ride the momentum you ride now get off soon when you find momentum is near to end!!! My reading is after an year or so the growth may not be sustainable as the competition gets tougher and we could ride the momentum now!!!

@TarunBhatnagarBeautifulWorld 3 жыл бұрын

let 3 quarter pass, let Amazon have a 2 quarter run on food delivery and we will know how good the story of zomato was. It's not a question of good or bad story, it's about a promising story

@ca.lokenderchauhan2605 3 жыл бұрын

Prof your valuation is correct. Because of Market has over liquidity so every ipo getting unreasonable good response. A co which is 13 year old not never make money just a cash burner is never a good investment. Also it is not startup anymore. 13 year is enough to see capability of management.

@Abhishek-rp5tp 2 жыл бұрын

You were damn right aswath it is trading from its all time high to down 59 rs

@rahulrajagarwal7296 3 жыл бұрын

Is it possible the current valuation is due to the institutional holdings? Because of the larger slice which was offered to institutions and they are trying to hold the current valuation till there holding period is over

@worldsoldestcivilization 3 жыл бұрын

DIY valuation spreadsheet: www.stern.nyu.edu/~adamodar/pc/blog/ZomatoDIY2021.xlsx

@rohit84783 2 жыл бұрын

Was trading under 50 today, you are great professor 👍🏻

@davidng2699 3 жыл бұрын

Would it be possible for Zomato to follow the competitive dynamic in China whereby Meituan now dominates the food delivery market with 65% share (in a 2 player mkt)? Or would the Indian food delivery mkt be fragmented and localized networking effects (no dominant player)?

@petergitau3630 3 жыл бұрын

Hi Prof, any chance you could do value the Square Afterpay deal ? Many seem to think the deal is overvalued. Would be interesting to see which story you think is most probable !

@poulomighosh8029 Жыл бұрын

Thanks much. I was hoping to use the numbers in the DIY spreadsheet - however I couldnt find IT services in the Global Industry Averages tab. Should I look at Computer Services instead?

@srtrades 3 жыл бұрын

Zomato has also entered Health and Nutrition space. They are making and selling Health supplements. I personally don't find it much interesting, but it is worth considering.

@mrsingh1228 3 жыл бұрын

Markets can be biased longer than you expect.

@adityasingh9712 3 жыл бұрын

Thanks prof please do lic india when its in 2022

@SUNILPAWAR-gk2qq 2 жыл бұрын

Respected Sir The Element of Cause is Greed and so dicounting price for future 60 to 90 years and so the P E Further the parameters shout and indicates Book VALUE and PRICE TO BOOK VALUE how many times ONE is paying for a Rupee or Dollar same is made unseen versus foreseeeeeeeeen So FUNNNNNNNNNNNY Psycological Bias I Love your way of Teaching to learn to grassroot facts and factuals really PRECIOUS ONES Thanks Take Care Regards

@nakulkashyap5205 3 жыл бұрын

The OG

@EliyahooAnavim 3 жыл бұрын

has anyone else could not open the spreadsheet links? some help would be greatly appreciated

@sjnvisuals6038 3 жыл бұрын

Arrived at same of 40, minsky hypothesis applicable to future prices?

@sreeharic1080 3 жыл бұрын

I dare the ones who criticized valuation of zomato by prof damodaran to do the valuation of zomato and justify its price.

@monsterboomer8051 3 жыл бұрын

Haha, they can't. They have no idea. If they did, they would embarras themselves so hard.

@navedahmed1698 3 жыл бұрын

I feel that years back when market was heavily influenced by institutional investors, the decisions by them were made using formal and established valuation principles. But now, as more retail investors are having their influence, the investment decisions are mainly made on instincts and popularity of the stock/a person.

@kekhaunter8002 2 жыл бұрын

The same way like bitcoin or the dogecoin being hyped by Elon musk ?

@changyudong9394 2 жыл бұрын

Professor，there is a Chinese food delivery company publicly listed on Hong kong market called Meituan（美团）

@dodgingdurangos924 2 жыл бұрын

what's the difference between market share and revenue slice?

@visionfinancierasonora9301 2 жыл бұрын

If you are going to criticize Aswath's assessment, it will be fair that you assess with your model and numbers what you yourself think they should be and publish it on this page so that the two methodologies can then be compared with fundamentals to be able to take a decision who has better foundations and reason. It is very easy to criticize without foundations, but very difficult to assess with sustainable foundations so that everyone can see and analyze it. Keep it up Aswath.

@hanningcastelino7315 2 жыл бұрын

Great Valuations Sir... Now Zomato coming closer to your Valuation price (INR 72 or 1.8 times of your price).. Might correct more coming days Thanks Hanning Castelino Manama/Bahrain

@motei1853 3 жыл бұрын

Zomato needs to be profitable in at least 5 years. Not manipulative profits but real profits. I don't see it making a profit in next 10 years if it will ever make a profit. In a country like India where rules and regulations change so much without proper recourse or redressal I don't see reason to risk investment when there are so many better investment opportunities.

@ShubhamSinghYoutube 2 жыл бұрын

Professor Damodaran, Zomato plans to cut delivery costs by using drones for delivery. Delivery costs is one of the biggest costs incurred by Zomato. What do you think about it's valuation If they do it successfully? (Or how does it change it's valuation).

@preetjain720 3 жыл бұрын

All the speculation on cloud kitchens, is there any data available on where they are in the process? There’s 0 data on R&D expenses of the firm in the red herring prospectus.

@investment7553 3 жыл бұрын

Did you make this video just as a case study or do you think that this company may grow in value?

@Do_Anything_you_want 3 жыл бұрын

Can anyone please tell me what software he is using?

@jerinjose4427 2 жыл бұрын

Listening to this now when Zomato has corrected 40% from its first day of trading..Lets see whats in store

@ManOfSteel1 2 жыл бұрын

even i dont see sustainability but these kids are out of their mind.

@abhilash8973 2 жыл бұрын

Why did you delete the recently uploaded videos on descriptive statistics? We miss content from you sir :D

@seeker4430 3 жыл бұрын

Let us not forget, zomato doesn't deliver from any corner to any of the city. So if a hotel is getting huge delivery demand, they can employ their own boys to run those errands like in Delhi and cloud kitchens will soon become a concept every one will copy if its lucrative. All I am saying is that there is nothing unique about the zomato model. Food on Zomato is more expensive than what you would get if you actually walked into the restaurant. They are getting those revenues through constant discounts and cashbacks. Wonder how long that IPO money can last. There is also another company calleed Dunzo which is close to failing and most likely they will pivot to food delivery. That grocery delivery story is true fairy tale. There are already established players zomato wont make even make a whimper there.

@tornado1031 2 жыл бұрын

can someone teach me how to use the google shared spreadsheet.

@manubhatt3 2 жыл бұрын

Aswath Damodaran: "I am not Subin Pillai or Dean of Evaluation or Special Expert on Valuation and Valuation is not a complex subject" Yes you are! And Valuation is a complex subject requiring advanced mathematics skills(the infinite series).

@akashchandrayan7255 3 жыл бұрын

“In the beginner’s mind there are many possibilities, but in the expert’s there are few” ― Shunryu Suzuki Investing is tough. Appreciate the quantitative part (and valuation to double decimal digits) but I guess only insights in business and domain expertise can help in zeroing down the options as the valuations range is large.

@luxushauseragency 3 жыл бұрын

Maybe Ketchup would be a better investment.

@mansisampat4202 3 жыл бұрын

respected sir, what formula did you use to come to the final conclusion of valuation in each case, can you pls share it

@sudiptakumar4847 3 жыл бұрын

Waiting to buy around 20-30 😁😁😁

@rampratap7858 2 жыл бұрын

You was right sir zomato naw Rupee 41 par shair

@umangadatia744 3 жыл бұрын

zomato has already burnt more than 3500 crores before launching ipo and still not surprised about the burning of cash but little more surprised about stability of business model, i mean to ask how can a company be sustained in the near future where there is no or nothing sustainability in the margins?

@jikarlohiya3028 2 жыл бұрын

Sir please do analysis of Bajaj finance Ltd.

@sgpleasure 3 жыл бұрын

Is Zomato planning to leverage it's platform to expand beyond just the restaurant/food delivery business? For example, they could go into online retail delivery, online payment platform and depending on Indian regulations, fintech? Otherwise, it is hard to justify current valuations only on restaurant delivery.

@rishabhjain7543 3 жыл бұрын

YES. YES YES. They're planning to enter restaurant business.

@tornado1031 2 жыл бұрын

corporate tax rate in india as of july 2022 is 22%

@dhawalodedra4298 2 жыл бұрын

Zomato at 45. Is it a good buy at current price? You said its fair price is 41. That time situation was different. Now after this BlinkIt Deal & other events in last 1 year, will it be a good buy.. new video is needed. Waiting for it..

@abhilash8973 2 жыл бұрын

I want to do the same work that you do but with the help of data science. Maybe incorporating these qualitative aspects in data science could actually bring about a better valuation for companies.

@SUNILPAWAR-gk2qq 2 жыл бұрын

Please Do it Sir Thanks Regards

@nigam.achint 2 жыл бұрын

less than 90 rupees (INR) now.. following the learning from this video, expecting another 40 percent decline.

@vamsikrishna9294 3 жыл бұрын

how often americans eat outside? indians not so much averages around weekly once!

@nani5987 2 жыл бұрын

now its at 57 prof

@pipoxter 3 жыл бұрын

Getting "404 not found" on the DIY valuation spreadsheet link :(

@AswathDamodaranonValuation 3 жыл бұрын

Try now.

@VijayKawale 3 жыл бұрын

@@AswathDamodaranonValuation Still not opening

@HimanshuSharma-oe4mk 3 жыл бұрын

@@AswathDamodaranonValuation still has the error . Also very insightful video, thank you.

@AswathDamodaranonValuation 3 жыл бұрын

No idea why. Try refreshing the page. It is working.

@mihir-so7bj 3 жыл бұрын

@@AswathDamodaranonValuation it is working fine for me, thanks dude!

@cmdevendran 3 жыл бұрын

Whatever you say, it is not going to ring in the ears of gurus who value zomato to 140+, euphoria might even take it past 200 to 500, but eventually it will meet its judgement day with reality.

@nevinkgeorge 2 жыл бұрын

Zomato trading at ₹47 today.