Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Private Capital Markets

<p><a href="https://www.smartkarma.com/entities/roofoods-ltd" target="_blank" data-smartkarma-citation="entities:27468:1" rel="noopener">Deliveroo (ROO LN)</a> 's IPO debut and its ESG related backlash should provide valuable lessons to <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a> which is expected to open for subscription in less than two weeks.</p>
<p>Deliveroo's ESG concerns especially the poor treatment of delivery workers were one of the prominent reasons for ROO's flop debut. In this insight, we address the key ESG concerns ZOM should address and improve its ESG disclosures as it prepares to hit the capital markets.</p>

Deliveroo (ROO LN) 's IPO debut and its ESG related backlash should provide valuable lessons to Zomato (ZOM IN) which is expected to open for subscription in less than two weeks.
Deliveroo's ESG concerns especially the poor treatment of delivery workers were one of the prominent reasons for ROO's flop debut. In this insight, we address the key ESG concerns ZOM should address and improve its ESG disclosures as it prepares to hit the capital markets.

Zomato (ZOM IN) | How to Avoid a Deliveroo

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Devyani International  / Equity Capital Markets

<p>Devyani International Limited (DIL), Yum Brand’s largest franchisor in India, aims to raise around US$200m via its Indian IPO. The IPO will be a mix of primary and secondary shares. </p><p>DIL operates a chain of quick service restaurants (QSRs) in India. Its core business is to operate KFC, Pizza Hut and Costa Coffee in India. It operated 655 stores across 155 cities in India, as of Mar 2021. These include 264 KFC stores, 297 Pizza Hut stores and 44 Costa Coffee stores. It also operates stores in Nepal and Nigeria for KFC and Pizza Hut. In addition, it also runs its own brands Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar in India. Yum owns over 4% stake in the company.</p>

Devyani International Limited (DIL), Yum Brand’s largest franchisor in India, aims to raise around US$200m via its Indian IPO. The IPO will be a mix of primary and secondary shares. DIL operates a chain of quick service restaurants (QSRs) in India. Its core business is to operate KFC, Pizza Hut and Costa Coffee in India. It operated 655 stores across 155 cities in India, as of Mar 2021. These include 264 KFC stores, 297 Pizza Hut stores and 44 Costa Coffee stores. It also operates stores in Nepal and Nigeria for KFC and Pizza Hut. In addition, it also runs its own brands Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar in India. Yum owns over 4% stake in the company.

Devyani Pre-IPO - Might Not Do Another Burger King India but Should Be Good

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>We cut EPS estimate for FY22/FY23 by 4/1%. We value Jubilant at 55x P/E on Jun-23E (earlier Mar-23) EPS and derive a target price of INR 2,650. We believe a large part of the recovery is priced in (trading at 70x/59x P/E on FY23/24). Maintain REDUCE. Jubilant FoodWorks: Jubilants 4QFY21 was slightly weaker than expected with the company seeing a miss on revenue and margin. Revenue/EBITDA was up 14/47% YoY vs. expectation of 17/56%. SSG was at +12% (2-year CAGR at 4%) vs. HSIE +16%. LFL (excluding temporary closures) was at +15%.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We cut EPS estimate for FY22/FY23 by 4/1%. We value Jubilant at 55x P/E on Jun-23E (earlier Mar-23) EPS and derive a target price of INR 2,650. We believe a large part of the recovery is priced in (trading at 70x/59x P/E on FY23/24). Maintain REDUCE. Jubilant FoodWorks: Jubilants 4QFY21 was slightly weaker than expected with the company seeing a miss on revenue and margin. Revenue/EBITDA was up 14/47% YoY vs. expectation of 17/56%. SSG was at +12% (2-year CAGR at 4%) vs. HSIE +16%. LFL (excluding temporary closures) was at +15%.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

<p>We cut our FY22E/FY23E EPS forecast by 12.5%/5.2% on account of: a) JUBI's lower than expected 4QFY21 result, and b) the effect of the lockdown so far in 1QFY22 due to the second COVID wave. The impact would have been more if not for the resilience shown in AprMay'21, as per the management commentary. Continued strong growth in the Delivery channel has meant that the severe impact on Dine-in was mitigated to some extent at the broader level. This led to ~90% recovery compared to the pre-COVID run-rate in these two months.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We cut our FY22E/FY23E EPS forecast by 12.5%/5.2% on account of: a) JUBI's lower than expected 4QFY21 result, and b) the effect of the lockdown so far in 1QFY22 due to the second COVID wave. The impact would have been more if not for the resilience shown in AprMay'21, as per the management commentary. Continued strong growth in the Delivery channel has meant that the severe impact on Dine-in was mitigated to some extent at the broader level. This led to ~90% recovery compared to the pre-COVID run-rate in these two months.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Result below our expectations, 1QFY22 resilient despite the lockdown

<div><p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a>  aims to raise US$1.1bn in its upcoming India IPO. This would be the largest listing in India from the technology sector.</p></div><div>
<p>Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.</p>
<p>We covered a little bit of the the company's history in <a href="https://www.smartkarma.com/insights/zomato-pre-ipo-filings-lack-narrative-a-little-bit-of-history-helps" target="_blank" rel="noopener">Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps</a>.</p>
<p>In this note, we will talk about the financials.</p>
</div>

Zomato (ZOM IN)  aims to raise US$1.1bn in its upcoming India IPO. This would be the largest listing in India from the technology sector.
Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.
We covered a little bit of the the company's history in Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps.
In this note, we will talk about the financials.


Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x

India

Jubilant Foodworks Ltd. owns and operates fast food chains. The Company offers donuts, baked goods, coffee, bagels, muffin, fruit milkshakes, smoothies, tea, sandwiches, pizza, and beverages. Jubilant Foodworks serves its products to customers throughout India.

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Jubilant Foodworks (JUBI IN)

Zomato (ZOM IN) | How to Avoid a Deliveroo

In this insight, we address the key ESG concerns ZOM should address to improve its ESG disclosures as it prepares to hit the capital markets.

Pranav Bhavsar

Devyani Pre-IPO - Might Not Do Another Burger King India but Should Be Good

Devyani International Limited (DIL), Yum Brand’s largest franchisor in India, aims to raise around US$200m via its Indian IPO. The IPO will be a...

Sumeet Singh

HSIE Results Daily: Jubilant FoodWorks

We cut EPS estimate for FY22/FY23 by 4/1%. We value Jubilant at 55x P/E on Jun-23E (earlier Mar-23) EPS and derive a target price of INR 2,650. We...

HDFC Securities

Result below our expectations, 1QFY22 resilient despite the lockdown

We cut our FY22E/FY23E EPS forecast by 12.5%/5.2% on account of: a) JUBI's lower than expected 4QFY21 result, and b) the effect of the lockdown so...

Motilal Oswal

Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x

Zomato aims to raise US$1.1bn in its upcoming India IPO. This would be the largest listing in India from the technology sector.

Sumeet Singh

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