New Delhi: International brokerage and lender HSBC in its latest analysis has increased Zomato’s target price to Rs 200 per share from Rs 160, citing continued market share gains in food delivery and potential from quick commerce. It raised order growth rates for Blinkit and gross value growth for 2024-2027.
HSBC predicts that nearly the entire Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margin for Blinkit, a Zomato subsidiary, will be driven by advertising revenues, with core business revenues compensating for cost. Currently, advertising revenues represent 3-4 percent of GMV, expected to rise to 5-6 percent in the next 3-5 years.
HSBC anticipates a significant rise in total advertising spend in India over the next 3 years, with digital advertising’s share increasing from 38 percent to 44 percent by FY27.
It expects Blinkit’s share of digital ad spend to rise from 3 percent to 18 percent in FY27, driven by its easily trackable ads compared to other platforms.
Zomato’s share price has experienced substantial gains up over 27 percent in the past 3 months and more than 196 percent in one year. Despite this, Zomato shares were trading 2.30% lower at Rs 153.20 a piece on the BSE.
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