Zomato is a play on the growing food services industry in India and increasing adoption of digital commerce. With only around 20mn monthly transacting users currently, Zomato has a long runway for customer acquisition and revenue growth, the brokerage said.
Blinkit is the market leader in the fast-growing quick-commerce space and is set to see sharp margin improvement in the steady-state, it added.
In its base case, Jefferies anticipates a compound annual growth rate (CAGR) of approximately 20 percent in delivery revenue from FY24 to FY27. As Zomato scales its operations, the brokerage expects unit economics to improve steadily through cost efficiencies and increased customer willingness to pay for convenience.
“We value Zomato’s delivery segment at 55 times its two-year forward adjusted EBITDA, quick commerce at 12 times its two-year forward sales, and the going-out business at 2.5 times its gross order value (GOV),” it said.
In its bullish case, Jefferies has put the target price at Rs 360, implying an upside of around 40 per cent as it projects a 25 percent CAGR in delivery revenue from FY24-27E. On the flipside, the brokerage has pegged the target price of Rs 200 in the downside scenario.
Posted By: Riya News Portal
Copyright © Riya News Portal 2024
