Zomato Is Now Worth More Than Dominos, McDonalds, KFC & Pizza Hut Combined In India

Zomato might’ve started off by listing restaurant menus on its site, but it now does better than some of India’s biggest restaurant chains.

Zomato is now worth more than the Indian operations of McDonalds, Dominos, KFC, Pizza Hut and Cafe Coffee Day put together. After a rally in recent months, Zomato’s shares currently trade at Rs. 160 per share. This values the company at Rs. 1.39 lakh crore.

In comparison, Westlife Foodworld, which runs McDonald’s in west and south India is worth Rs. 11,500 crore. Jubilant Foodwords, which runs brands including Dominos, Dunkin Donuts and Popeyes is worth Rs. 29,000 crore. Devyani International, which runs KFC, Pizza Hut and Costa Coffee in India, is worth Rs. 18,500 crore. All these brands put together are worth a paltry Rs. 59,000 crore, less than half of Zomato, which is alone worth Rs. 1,29,000 crore.

This wasn’t the case until just a few quarters ago, when Zomato’s stock was languishing at Rs. 40 per share, and its market cap was Rs. 32,000 crore. But as Zomato has managed to report its first ever profit, and seen the business of Blinkit grow, its stock has risen rapidly, and left behind established pan-India food brands.

There are a few reasons why Zomato ends up being worth so much more then established food companies. Zomato is valued like a tech platform, and get awarded a much higher multiple than traditional food companies. Its being a platform also insulates it from company specific risk — while these other brands could see their business be taken away by hundreds of other competitors, Zomato only competes with Swiggy, and is much harder to disrupt. Zomato, being relatively new, is also is thought to have a higher headroom to grow than traditional food brands.

But it does feel a bit odd that Zomato is worth so much more than the massive brands it hosts on its platform. India’s food ordering market is quickly getting saturated, and Zomato’s topline could end up growing at roughly the same rate as for these top food brands. Zomato could also see its demand fall as it cuts down on discounts and promotions to meaningfully grow its profits. And while Blinkit is growing quickly, no business has yet managed to demonstrate a profit in the quick commerce space. But for now, 15-year-old Zomato has managed to build for itself a business that’s worth more than virtually all big-name global food brands in India put together.