Adjusting Zomato | Value Research This week’s meme story is dedicated to Zomato for becoming “profitable”
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Adjusting Zomato

This week's meme story is dedicated to Zomato for becoming "profitable"

Adjusting Zomato

Today, we are going to have a different kind of meme story. Normally we troll many companies in the same story but today, we are dedicating our entire story to one company: Zomato. Let me first tell you the context and then let us go. Zomato recently came out with their Q3 results and they have become profitable! Now before you jump in joy, they are profitable at EBITDA level. Now before you start walking in joy, it is adjusted EBITDA. Before you start sitting in joy, it is the pre-acquisition of Blinkit. See how it is? How irritated you became? So is the market. Adjusted EBITDA, adjusted revenue. Next adjusting for all the price erosion, your investment in Zomato would have been profitable. Now see the collection of memes and tweets dedicated to this minor adjustment.

Now a question may arise, why is the market so harsh towards Zomato? After all, they only reported what happened. But that's not how it is. Profit is actual profit, not adjusted. What is the point of adjusting an acquisition, like it is some sort of an exceptional item? Beyond laughing, investors must question such metrics and ask where the actual profit or cash flow is. The market moves based on actual numbers and not adjusted numbers.

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