According to Jefferies, metrics like “adjusted Ebitda” issued by modern, publicly traded companies, in this case, Zomato Ltd., have “good logic.”

“The profit and loss charge is also upfront under accounting regulations. Since Zomato is no longer a startup that must significantly rely on ESOPs, new grants are rapidly declining. The current pool appears to be adequate for several years. Investors have a significant voice, and future ESOPs require the approval of more than 75% of shareholders “It read.

Market observers have taken issue with financial reporting that uses metrics like adjusted Ebitda profitability rather than more conventional measures like revenue, profit, and Ebitda. To attract and keep talent, Jefferies claimed that stock-based compensation is a crucial tool for venture capital-funded online companies.

According to Zomato, new grants, a leading indicator of ESOP expenses in the future, have been consistently dropping over the past three years.

The stock is given a “buy” rating by Jefferies and has a target price of Rs 100, which suggests a possible return from present levels of roughly 85%. Throughout the years FY22 to FY26, it expects delivery revenue to increase by 25% annually while unit economics continue to get better.

According to Bloomberg statistics, 20 of the 26 analysts following the company continue to recommend a “buy,” three indicate a “hold,” and three suggest a “sell.”

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