Zomato joins top 100 on BSE, shares reach new 52-week high amid profitable quarter

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September 18, 2023

Zomato, the foodtech giant, marked a significant milestone on Monday, (September 18), as its shares on the BSE soared to a new 52-week high of INR 105, driven by a 2% intraday trading surge.

Following the company’s first profitable quarter in Q1 FY24, Zomato has experienced a remarkable surge, propelling its market capitalization beyond the $10 billion mark. With a current valuation of $10.74 billion, Zomato has secured a place among the top 100 companies on the BSE by market capitalization, sharing this prestigious list with industry giants such as Adani Energy, Tech Mahindra, Grasim Industries, and Tata Motors.

At 1:20 PM IST, Zomato’s shares were being traded at INR 103.47 on the BSE.

The current trading level of its shares is reminiscent of the levels observed at the end of January last year.

Throughout the previous year, the foodtech giant’s shares faced substantial downward pressure, similar to many other recently listed tech startups. This was primarily due to an economic downturn and the market’s increasing focus on profitability.

Nonetheless, with its dedicated focus on profitability, and the successful attainment of this goal, Zomato shares have surged by more than 74% year-to-date.

Last week, Equirus Securities kicked off their coverage of Zomato with a ‘long’ rating, along with a price target (PT) of INR 135. They confidently predicted that the startup would emerge as one of the fastest-growing players in India’s internet landscape.

The brokerage additionally emphasized that Zomato’s strong position in the underexplored food delivery sector is expected to fuel an impressive 31% compound annual growth rate (CAGR) in sales from FY23 to FY28.

Last week, Bernstein revised its price target (PT) for Zomato, raising it from INR 100 to INR 120. They cited Zomato’s elevation of the profitability standard as the reason for this adjustment.

In the meantime, Zomato continues to concentrate on upholding its profitability strategy. In its most recent development, the company announced the closure of its Slovakian subsidiary last week.

Conversely, the foodtech giant has introduced a platform fee of INR 2 and INR 3 per order, a move that is anticipated to enhance its margins, according to the assessments of certain analysts.

Also Read: Zomato shares surge by 6% in response to high trading activity and platform fees

Dabur aims to elevate Hajmola and Odomos to ‘power brand’ status in portfolio expansion drive

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September 18, 2023

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Home-grown FMCG major Dabur is taking significant steps to enhance the reach and prominence of its digestive brand, Hajmola, and its mosquito repellent brand, Odomos. CEO Mohit Malhotra has revealed strategic plans to elevate these brands to the coveted status of “power brands” within Dabur’s extensive portfolio. Presently, Dabur boasts a strong lineup of nine distinct power brands, with eight dominating the Indian market and one thriving in international markets. These power brands collectively contribute a substantial 70 percent to the company’s total sales.

At present, a significant portion of Dabur’s revenue, accounting for 75 percent, is derived from its domestic operations. This domestic business primarily centers around eight power brands, namely Dabur Chyawanprash, Dabur Honey, Dabur Honitus, Dabur PudinHara, Dabur Lal Tail, Dabur Amla, Dabur Red Paste, and Real.

Vatika serves as Dabur’s global power brand, delivering a diverse array of personal care products tailored to the international market.

During his recent address at the investor meet, Malhotra disclosed that Dabur presently boasts 17 brands with revenue ranging from above INR 100 crore to less than INR 500 crore in size.

“We have 17 brands, which are in the range of INR 100-500 crore. These are the brands for the future, which we will scale up. If you look five years prior, they all were sub-INR 100 crore brands,” he said.

Furthermore, Malhotra emphasized Dabur’s intention to expand these brands, leveraging their existing scale, and aims to introduce them to as many households as feasible.

“Hajmola for example, we are trying to push it into a power brand. Though, it has not reached that scale. Right now it’s a INR 350-400 crore brand for us. We are trying to move it to the power brand structure,” he said.

Malhotra further added, “For Odomos, it is still the same. It is still not a power brand (acquired from Balsara), we are trying to scale it up… as we scale up the turnover of the brand, we will keep moving into power brand architecture.”

Dabur’s power brand strategy will involve increased manufacturing, broader distribution, and expansion into related market segments.

“More resources would be invested into the brands (power), more brand managers would be working on it and more bandwidth would be deployed on these brands besides cash deployment in terms of advertising,” Malhotra added.

The company is structured into three divisions: healthcare (HC), home and personal care (HPC), and food and beverages.

“We will scale all brands,” he said. Dabur is extending its brand Gulabari into the body wash and soaps segment and has forayed in ready-to-cook gulab jamun mix with the brand Hommade.

Its juice brand Real revenues are around INR 1,600 crore and it is on track to surpass the INR 2,000 crore milestone in the next few years.

Dabur’s Real brand has undergone a remarkable evolution, branching out from its initial presence in the juices and nectars category to encompass a wide array of offerings. These now include fruit drinks, an extensive PET portfolio, aloe vera-infused beverages, plant-based options like Soya and Almond drinks, effervescent fruit beverages, creamy milkshakes, refreshing coconut water, nutritious superfoods like Real Seeds, and most recently, the exciting addition of Real Peanut Butter to its product line.

Dabur’s brands such as Dabur Red Paste, Dabur Amla, and Vatika achieve annual sales figures ranging from INR 1,000 crore to INR 1,500 crore, whereas Dabur Chyawanprash and Dabur Honey fall within the revenue bracket of INR 500 crore to INR 1,000 crore.

Malhotra stated that for its international business, which accounts for a quarter of the company’s revenue, the company will leverage regional insights and innovations.

In addition to Vatika, Dabur maintains its international presence with brands like Dabur Amla, Hobby, ORS, and acquired brands. Malhotra also mentioned that the company is actively developing other brands within the oral care and skin care segments, including Dermoviva, to further expand its portfolio.

Tim Hortons’ expansion brews excitement with new outlets in Bengaluru

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September 18, 2023

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Tim Hortons, the well-known Canadian coffee chain, is all set to make its mark in Bengaluru, India. Given that Karnataka, recognized as the coffee capital of India, contributes a significant 70 percent of the nation’s coffee production, it’s only natural for Tim Hortons to choose this vibrant region as the perfect place to unveil its newest haven for coffee enthusiasts.

These significant openings are scheduled for Terminal 2 of Kempegowda International Airport and the lively Koramangala neighborhood. This represents a major achievement in Tim Hortons’ expansion plan, as it introduces its iconic beverages and delicious offerings to the southern region of India.

Starting from September 15th, customers will have the delightful opportunity to enjoy Tim Hortons’ renowned 100 percent premium Arabica coffee and indulge in iconic beverages such as the rich and creamy French Vanilla, the Java Chip Iced Capp, a refreshing blended frozen coffee treat, along with made-to-order meals and freshly baked goodies, including the beloved bite-sized traditional donuts known as Timbits.

As a testament to its dedication to embracing local flavors and preferences, Tim Hortons is adding two delightful regional specialties to its menu: the Ghee Roast Paneer Pocket and the Pepper Chicken Pocket. These additions celebrate the rich culinary heritage of Southern India and enhance Tim Hortons’ current food menu, which includes favorites like the Five Cheese Melt, Bagels, Piadinas, and more.

The Kempegowda location embodies Tim Hortons’ innovative approach, showcasing distinct Canada-inspired decor elements and introducing a range of specialty brewing techniques to elevate the customer experience. This offers fresh and unique ways for patrons to savor Tim Hortons’ signature coffee blends.

The store’s welcoming atmosphere, combined with its friendly staff, will foster a hospitable environment where visitors can relax, work, or socialize with friends while enjoying their beloved Tim Hortons treats.

Tarun Jain, CEO of Tim Hortons India, expressed, “The expansion of Tim Hortons into Bengaluru is a momentous occasion for us. Following the brand’s success in Delhi, Punjab, and Mumbai, we are thrilled to offer the same experience to this vibrant city, all while paying tribute to local culinary traditions. This marks a significant stride in our journey, and we eagerly anticipate becoming a part of the Bengaluru community.”

Thiago Santelmo, EMEA President of Restaurant Brands International said, “As we continue our expansion in India. We look forward to introducing more coffee aficionados across the country to our signature Tim Hortons beverages and delectable food.”

The grand opening celebrations started on September 15th at 2:00 pm in Terminal 2, Departures, Kempegowda International Airport, and on September 16th at 5:00 pm in Koramangala, 8th Block.

Zomato’s stock surges 1.7% as investors show increasing faith in the company’s growth

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September 18, 2023

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Zomato’s stock witnessed a 1.7 percent surge in trading activity on the NSE on September 18. This noteworthy uptick can be primarily attributed to the increasing faith that investors have placed in the company, bolstered by Zomato’s impressive showcase of revenue growth and margin expansion prospects.

As per a Jefferies report, the majority of investors praised CFO Akshant Goyal during the company’s US roadshow for effectively fulfilling commitments made a year prior.

“Scepticism was high back then, while the exact opposite is true now,” Jefferies said in the note.

The Zomato CFO anticipates a 20-25 percent increase in the value of its food delivery segment, while the new quick commerce business is expected to achieve a remarkable 60 percent Compound Annual Growth Rate (CAGR). Jefferies emphasized that the food delivery sector has significant growth potential in India, with restaurants accounting for only 10 percent of total food consumption. Zomato (along with Swiggy) is facilitating this growth by sharing local insights with restaurants, leading to improved cuisine diversity and increased local demand.

Conversely, Zomato’s quick commerce sector has the potential to surpass even the food delivery segment in India’s extensive retail market.

Furthermore, Jefferies anticipates a gradual expansion of food margins to reach 5%, with quick commerce expected to achieve break-even within four quarters.

Jefferies, maintaining a ‘buy’ rating on the food delivery platform and setting a target price of INR 130, suggests that Zomato, currently catering to approximately 20 million monthly transacting users, possesses a substantial opportunity for customer acquisition and revenue expansion. However, the report notes that this growth trajectory might come at the expense of short-term profitability. Following its IPO, the company’s focus has shifted from immediate survival to preparing for the future, as per the report.

At 11:24 am, Zomato’s shares were being traded at INR 104.10, marking a remarkable 96 percent increase over the past six months.

Online fashion brand FableStreet expands to physical stores, targets 10-15 outlets by next year

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September 18, 2023

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FableStreet (Representative Image)

FableStreet, the online fashion brand, is venturing into brick-and-mortar retail, with ambitious plans to establish 10 to 15 stores by mid-September of the following year, as shared by Ayushi Gudwani, the Founder and CEO of FS Life.

The brand supported by Fireside Ventures is set to launch three flagship stores between mid-September and October. These stores will be located at Phoenix Marketcity in Kurla, Phoenix Palladium in Lower Parel, and Phoenix Mall of Millennium in Pune.

Additionally, the brand is actively exploring potential locations to establish stores in Delhi and Bengaluru.

“The average store size will be between 700-1,000 sq.ft and we plan to open at least five stores by the end of this fiscal,” she said.

At the outset, the brand will inaugurate its stores in well-suited malls and prime high street locations within metro and tier I cities. Subsequently, it will expand its presence further into tier II and beyond.

These stores are designed to provide an omnichannel experience, allowing customers to effortlessly explore the website and make in-store purchases. Nonetheless, the stores will consistently feature a selection of 200 to 250 styles at any given time.

“As we keep churning the inventory at a rapid speed, the store will be refreshed every two weeks,” she said.

The capital expenditure (CAPEX) required to launch a single store can vary between INR 30-50 lakh. The brand’s goal is to attain EBITDA profitability for each store within the initial 2-3 months of operation and recoup the capital investments within 1-1.5 years.

The brand boasts a 50 percent repeat customer rate, with an average cart size ranging from INR 3,200 to INR 3,300. Its online customer acquisition cost (CAC) falls within the range of INR 1,200 to INR 1,400.

Last fiscal, the brand notched INR 58 crore in revenue, and for the current fiscal year, it is setting its sights on exceeding the INR 100 crore milestone.

“By the end of this fiscal, the offline retail will contribute around 5 per cent of the overall revenue and by the end of next fiscal, we are aiming to take it up to 25-30 per cent,” she stated.

Having secured three rounds of funding thus far, the brand has dedicated approximately 20 percent of its fundraising efforts to finance its offline expansion in the form of a loan.

“We are planning to raise Series B investment and expect to hit the market early next year. We expect to raise $15-20 million to expand our offline presence and scale online presence, and we will also be using these funds for working capital and inventory build-up,” she said.

In addition to the established seven-year-old FableStreet, FS Life introduced two new brands – March Jewellery and PinkFort – just six months ago. The company anticipates that these two brands will contribute approximately 10-12 percent of its total revenue.

Malaysia’s ZUS Coffee to make international debut in the Philippines, plans six outlets by 2023

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September 18, 2023

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Malaysia’s ZUS Coffee is set to make its international debut this month with its first outlet in Quezon City, the Philippines.

The tech-centric coffee chain launched its inaugural store in Binjai towards the end of 2019 and currently manages around 290 stores throughout Malaysia.

In a LinkedIn post, Chief Operating Officer Venon Tian announced that ZUS Coffee intends to establish six outlets in the Philippines by the conclusion of 2023.

ZUS Coffee’s introduction to the international market in the Philippines has been in the works since March 2023 when the Filipino restaurant group Choi Garden Restaurant Company acquired a 35% stake in the coffee chain.

Speaking at the signing of the agreement, Choi Garden’s Chief Operating Officer Janica Lao said, “ZUS Coffee’s growth in Malaysia has been very quick in the last three years and they are incredibly determined in serving the local Malaysian market with localised flavours. We believe that they will do the same thing in the Philippines market.”

ZUS Coffee joins the roster of Asian coffee chains looking to expand in the Philippines this year, intensifying the competition among Southeast Asia’s coffee franchises.

The Japanese boutique café group % Arabica made its return to the Philippines in July 2023, following an 18-month hiatus during which it shuttered its three local stores. The Manila branch is anticipated to serve as a precursor to the opening of a % Arabica roastery in the Filipino capital before the year’s end.

The subsequent month, Jollibee Foods Corporation (JFC), a fast-food group, established a joint venture enterprise with Singapore’s Food Collective Pte. Ltd. (FCPL) to introduce Common Man Coffee Roasters to the Philippines. The inaugural location of this partnership, which also encompasses an agreement to introduce Tiong Bahru Bakery to the country, is scheduled to open in the coming months.

At the same time, Berjaya Food from Malaysia is gearing up to launch the inaugural Paris Baguette store in the Philippines during the fourth quarter of 2023, with plans to open five more outlets within the next year. Berjaya Food had previously introduced the South Korean bakery café chain to Malaysia in January 2023.

Coffee Day’s FY 2022-23 revenues soar 59% to INR 924 Crore as debt declines

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September 18, 2023

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On Friday, Coffee Day Enterprises (CDEL) announced a significant increase in its net revenues for the fiscal year ending on March 31, 2023. The company reported a remarkable 59% surge, reaching INR 924 crore, in contrast to the INR 582 crore recorded in the preceding fiscal year.

In the fiscal year 2022-23, the company’s consolidated coffee business played a significant role in its financial performance by contributing INR 869 crore to the top line. This segment accounted for a substantial 94% of the company’s net revenues, while hospitality contributed 5%, with the remaining 1% coming from other operations.

During the annual general meeting (AGM) held in Bengaluru on Friday, Company Chairman SV Ranganath provided a comprehensive overview of the company’s financials, including revenue, sales, debt status, and other pertinent information. The company, established by the late VG Siddhartha, is publicly listed and operates cafes, vending machines, and its hospitality venture under the Serai brand name.

During the fiscal year ending on March 31, 2023, the average daily sales per café experienced a notable surge, rising by 42% to reach INR 20,622. Simultaneously, the same-store sales growth (SSSG) surged by an impressive 50.59% over the same period. Ranganath reported that the café network achieved further consolidation, boasting 469 outlets spread across 154 cities.

In the past year, the number of operational vending machines saw a notable uptick, surging by 26%. At the same time, the average daily revenue per vending machine experienced a substantial increase of 65.80%, reaching INR 431. As of March 31 of this year, the total count of operational vending machines stood at 48,788.

As of March 31 this year, CDEL’s net debt decreased to INR 1,524 crore, which is a decline from INR 1,694 crore reported a year earlier. Specifically, the company had INR 1,297 crore in long-term borrowings and INR 303 crore in short-term borrowings as of March 31 this year.

The cafe market has been witnessing significant growth in the urban areas where a larger working population is inclined to accept western cuisines as well as baked products, Ranganath said. “Our vending business has also strongly benefited from our Café Network and Customer brand loyalty, apart from its world class range of products and machines…The hospitality industry, which suffered a significant setback due to the pandemic in the past two years, has experienced a reversal of fortunes in the fiscal year 2023 and is now steadily heading towards its growth path.”

The company, as highlighted by the CDEL Chairman, is leveraging cutting-edge technology to maintain a competitive edge. By implementing AI, they have enabled video analytics for a more insightful understanding of customer preferences and choices in cafes. Furthermore, the introduction of new snacks and beverages has contributed to revenue growth. The revitalized designs and renovations of cafes and resorts are enhancing the ambiance for both formal meetings and casual gatherings.

As of March 31, the Company’s net worth amounted to INR 3,376 crore, marking an 11% decrease from the INR 3,775 crore reported on March 31, 2022. This net worth was composed of a paid-up equity share capital of INR 211.3 crore, non-controlling interests amounting to INR 158 crore, and the company’s reserves and surplus totaling INR 3,007 crore as of March 31, 2023.

According to the SEBI order dated January 24, 2023, the company was in discussions with Crest Law, an independent law firm appointed by NSE, to initiate actions aimed at recovering outstanding dues owed to CDEL’s subsidiaries by Mysore Amalgamated Coffee Estates Ltd (MACEL). Crest Law is currently in the final stages of preparing the draft lawsuit to be filed by the company’s subsidiaries against MACEL.

Singapore-based Growtheum Capital Partners invests in Indonesia’s KIN Dairy

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September 18, 2023

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Growtheum Capital Partners (GCP), a private equity firm headquartered in Singapore, has revealed its investment in KIN Dairy, an Indonesian dairy product manufacturer, after successfully raising $567 million for its inaugural fund.

The specific financial details of the transaction have not been disclosed; however, insiders with knowledge of the situation suggest that the investment is approximately valued at $70 million.

Having made this investment, Growtheum has joined Mitsui & Co as a supporter of KIN Dairy’s ambitions to achieve market leadership within Indonesia’s dairy industry.

Earlier this year, Growtheum injected approximately $100 million into International Dairy Products (IDP) in Vietnam.

KIN Dairy, Growtheum’s latest dairy sector investment, stands out as a vertically integrated dairy manufacturer specializing in the production of yogurt and milk products under the KIN brand. Moreover, as per the announcement, it proudly operates one of the largest and only A2-cow dairy farms in Indonesia.

Nestled at an elevation of 1,350 meters above sea level in the mountainous expanse of West Java Island, this farm spans across 80 hectares and boasts state-of-the-art milking, feeding, and processing technologies.

“With the company’s relentless commitment to product innovation, nutritional values, and best-quality ingredients, KIN Dairy represents an attractive opportunity for GCP to realise the market opportunity,” said Kusnadi Pradinata, senior managing director at the PE firm.

Warren Choo, the President Director of KIN Dairy, expressed that the impressive track record of Growtheum Capital Partners in working alongside management teams to foster the growth and development of consumer companies in Southeast Asia aligns perfectly with the interests of the Indonesian manufacturer.

Approximately a month following the successful closure of Growtheum’s inaugural fund at $567 million, a figure slightly below its initial target range of $600 million to $800 million, this investment in KIN Dairy has been announced.

Growtheum SEA Fund I, focused on investments in Southeast Asia and India, successfully secured commitments from approximately 40 limited partners (LPs), including notable institutional investors like the World Bank’s International Finance Corporation (IFC) and the Asian Development Bank (ADB). The fund has already executed a series of investments as part of its deployment strategy.

Growtheum has made investments in several Indonesian companies, including the e-grocery platform AlloFresh, the digital lender Bank Allo, the hospital group Mitra Plumbon Healthcare Group, and IDP, among others.

The firm typically invests amounts ranging from $50 million to $350 million. While it tends to avoid smaller deals, Growtheum’s Managing Partner Amit Kunal mentioned earlier that it can adapt and be opportunistic with its investment sizes when necessary.

Superorder secures $10 Million in Series A and angel funding for restaurant growth solutions

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September 18, 2023

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Superorder, formerly known as Forward Kitchens, a company based in New York that offers growth management solutions for restaurants, successfully secured $10 million in Series A and angel funding.

Foundation Capital took the lead in this funding round, and it also saw participation from notable figures such as Michael Seibel (Managing Director of Y Combinator), Kyle Vogt (Co-Founder and CEO of Cruise), Jon Swanson (Chairman of Thumbtack), James Beshara (Founder of MagicMind), BBQ Capital, I2BF Global Ventures, and various other investors.

The company plans to utilize the capital to further its expansion efforts.

Established in 2019 by Raghav Poddar, Superorder empowers restaurants with a comprehensive suite of tools encompassing Order Management, Automated Marketing, Financial Management, an AI-driven Website Builder, and AI-enhanced Images & Menus. With a presence in over 180 cities, Superorder collaborates with more than 1,500 restaurants today, delivering solutions that drive increased revenue through delivery and takeout, especially via virtual brands. The company equips restaurants with the capability to efficiently manage shifts, automate their marketing efforts, and streamline financial operations. By leveraging its proprietary AI algorithms, Superorder assists restaurants in identifying unmet market needs, thus optimizing revenue and profitability for their virtual brands. Furthermore, the platform consolidates orders from various platforms into a unified system, saving time, reducing errors, and enhancing overall operational efficiency.

Furthermore, the company unveiled a range of generative AI and order management solutions tailored to enhance restaurant profitability from online sales. This funding round comes on the heels of a sustained period of growth for the company, coinciding with its recent rebranding from its former identity as Forward Kitchens.

Poddar, an alumnus of Columbia University, conceived the company while participating in the Y Combinator Summer 2019 cohort. His inspiration came from observing the subpar online presence of his favorite restaurants, motivating him to address this issue. In 2021, Superorder made headlines by unveiling a $2.5 million seed round. The funds were instrumental in both expanding the company’s reach and assembling a proficient team across various departments, including operations, sales, and engineering, to bolster the initial product offering. Presently, the company boasts a dedicated team comprising over 70 employees.

Subway steps up convenience game with new in-app delivery platform

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September 18, 2023

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Subway has introduced its very own in-app delivery platform, known as Subway Delivers. Rodica Titeica, Director of Marketing for Subway ANZ, expressed that Subway Delivers represents the brand’s newest step forward in ensuring that quick and freshly prepared made-to-order meals are readily accessible to a greater number of Australians.

“We recognise how important convenience and ease of accessibility is in the increasingly busy lives of our customers. With the introduction of the new Subway Delivers in-app delivery service, Subway fans across Australia and New Zealand can get fast and fresh, healthy and convenient meals morning, noon and night,” Titeica said.

Via the Subway app, Subway Delivers offers fans an even more convenient way to order Subway’s famous Subs, salads, cookies, and more for instant delivery. Moreover, it provides the option to pre-order catering platters up to four weeks in advance.

To mark the app’s debut on September 15th, the brand commemorated the occasion by distributing 1,000 complimentary Footlongs at unexpected venues in Brisbane, Sydney, and Auckland.

The celebration continues today, on the 18th of September, offering customers the opportunity to enjoy free delivery via Subway Delivers until the 1st of October.

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