Blinkit's implied valuation more than Zomato's food delivery business, says Goldman Sachs; check new TP

Zomato share price:  Shares of Zomato gained over 3 per cent in Friday's morning deals after Goldman Sachs assigned a 'buy' rating to the stock and raised the target price to Rs 240 from Rs 170, an increase of 41 per cent. The stock closed 1.84 per cent at Rs 188.15 apiece on BSE.

The global brokerage said in its report that Blinkit's implied valuation is higher than Zomato's food delivery.

At around 11:01 am, shares of Zomato traded 2 per cent, or Rs 3.7, higher at Rs 188.45 apiece. The market capitalisation of the company at around the same time stood at Rs 1,66,208.82 crore. 
 
Zee Business research notes that Blinkit was bought by Zomato in 2022 at a valuation of $600 million, which has now increased to $13 billion. The report further stated that the market is underestimating Blinkit's growth and profitability potential.

Moreover, Blinkit's gross order value (GOV) is 50 per cent higher than Goldman Sachs' estimate. Additionally, Blinkit's GOV is estimated to grow by 53 per cent during FY24–27, and Zomato's adjusted revenue is expected to grow at a 32 per cent compound annual growth rate (CAGR).

Zomato Food Delivery Vs Blinkit per share value

Source: Zee Business Research 

Currently, Zomato is trading at a discount to the MSCI India Consumer Discretionary Index. 

Source: Zee Business Research 

Zomato: How were the Q3 results?

Online food delivery platform Zomato performed better than the estimates of Zee Business Research in the December quarter. The company made a consolidated profit of Rs 138 crore in the quarter under review, against a loss of Rs 347 crore in the same quarter a year ago. The profit for the September quarter was Rs 36 crore. Zomato's revenue from operations in Q3 increased from Rs 1,948 crore to Rs 3,288 crore YoY.

Revenue for the September quarter was Rs 2,848 crore. The company suffered a loss of Rs 21 crore in the September quarter. EBITDA was Rs 51 crore, which was a loss of Rs 366 crore a year ago.

The company is yet to announce its Q4 result.

Zomato share price: Past performance 

In a year, shares of Zomato have given a multi-bagger return of over 223 per cent as against Nifty50's rise of 26 per cent. 

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