Zomato’s Share Price Set to Surge 22% on the Back of Food Delivery Growth and Blinkit’s GMV Expansion: Kotak Equities
Kotak Institutional Equities has reaffirmed its positive outlook on Zomato, maintaining a ‘buy’ rating on the food delivery giant and setting a target price of Rs 305. The equity research firm anticipates a significant 22.3% increase in Zomato’s share price, driven by robust growth prospects in the food delivery segment. Additionally, Kotak Equities projects a substantial 19% year-on-year growth in Zomato’s Gross Merchandise Value (GMV), underlining the company’s solid performance in the competitive food delivery market.
Moreover, Kotak Equities has also highlighted the remarkable growth trajectory of Blinkit, formerly Grofers, by forecasting an impressive 114% surge in its GMV. While this growth is indeed promising, it comes with a caveat – Blinkit’s aggressive expansion strategy may result in widening Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) losses in the near term. Despite this, the company’s robust unit economics provide a strong foundation for sustained growth in the long run.
Zomato’s resilience and ability to adapt to changing market dynamics have been key factors in its success. The company’s continued focus on enhancing user experience, expanding its restaurant network, and improving delivery efficiency have positioned it as a market leader in the food delivery space. With the surge in demand for online food delivery services, especially in the wake of the COVID-19 pandemic, Zomato is well-positioned to capitalize on this trend and further strengthen its market presence.
Blinkit, on the other hand, has been making significant strides in the online grocery delivery sector. The company’s rebranding and strategic initiatives have resonated well with consumers, leading to a remarkable growth in GMV. While the path to profitability may still be a work in progress for Blinkit, its relentless focus on growth and innovation underscores its potential to emerge as a key player in the competitive e-commerce landscape.
In conclusion, Kotak Equities’ optimistic projections for both Zomato and Blinkit reflect the underlying potential and growth opportunities present in the food delivery and online grocery sectors. As these companies continue to innovate and expand their operations, investors can look forward to promising returns in the future.
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