Hedge fund manager Anurag Singh has raised questions about Zomato’s valuation as the food delivery giant posted Q1 results earlier today, that saw shares rocketing. Singh is a managing partner at Ansid Capital.

What Happened: On August 1, Singh took to X (formerly Twitter) to express his scepticism about Zomato’s current valuation of around $28 billion (around ₹2.04 lakh crore). He pointed out that even with the company’s reported profit of ₹253 crore ($30 million) and revenue of ₹4,000 crore ($470 million), it would take an investor “230 years” to recover their money at the current rate of profit after tax (PAT).

Singh, who is also an IIM Lucknow alum, further stated that even if the company had zero expenses and handed over all its revenue to shareholders, it would still take “15 years” to recover the investment. Singh also questioned the thin margins in the delivery business and criticized private equity for the “taxation” of investment.

He added “If this is the ‘India story’, it needs a hard reality check. And fast!

Singh’s comments come in the wake of Zomato’s Q1 results, which saw its net profit rise over 100 times to ₹253 crore, beating analyst expectations. This was a 44.6% increase from the ₹175 crore it made in the fourth quarter of FY24.

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