Brokerage company Goldman Sachs increases target price of Zomato’s equities, here’s why
The inferred value of the grocery delivery platform that Zomato acquired in 2022 is now greater than the meal delivery segment of Zomato, according to Goldman Sachs analysts.
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Goldman Sachs, a global brokerage firm, maintained its Buy rating on Zomato but increased the target price from $170 to $240. With this adjustment, there might be a 30% increase in value from the previous closing price of ₹184.
Zomato shares saw a 3% increase following the brokerage firm’s increase in target price, hitting ₹190.4 on Friday during BSE trading. The development potential of its fast commerce business Blinkit is the main driver of the upside.
It also predicts that between the fiscal years 2024 and 2027, Blinkit’s Gross Order Value would expand at a compound annual growth rate (CAGR) of 53%.
“We note that Blinkit’s implied valuation in our Zomato’s sum of the parts (SOTP) is (close to) $13 billion now, versus $2 billion in March 2023, with per share implied value of ₹119 higher than food delivery, at ₹98, for the first time,” Goldman Sachs mentioned in a note.
On the BSE, Zomato’s shares increased 1.9% during Friday’s trading session to hit ₹188.2. It has experienced an impressive increase of almost 50% so far this year, and over the last 12 months, it has gained 220%.
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