“We increase our GMV estimates for food delivery (+2-3%) and quick commerce (+20-30%) for FY26-28e following the strong Q1 and solid guidance. Our adj EBITDA estimates for the next 1-2 years are up only slightly as investments in building supply for quick commerce will likely result in a more modest margin trajectory,” UBS said in a note while maintaining a buy call.
The brokerage said it has also increased employee cost estimates to reflect investments in manpower.
“These changes, coupled with a roll forward of our valuations and higher multiples for Going Out and Hyperpure, lead to a higher PT of Rs320. Zomato is trading at FY27e EV/EBITDA of 35x, vs the avg of Indian consumer / retail peers at 30x, with a superior growth and margin expansion profile,” it said.
CLSA has the highest target price on Zomato – Rs 350. On the other hand, Motilal’s target is Rs 300, Nomura’s Rs 280, and Bernstein’s Rs 275.
In the June quarter, Zomato reported a multi-fold jump in Q1 profit from Rs 2 crore in the corresponding quarter of last year to Rs 253 crore in Q1. Revenue from operations in the reporting period increased 74% year-on-year (YoY) to Rs 4,206 crore. Zomato shares have more than doubled so far in the calendar year 2024 with its market capitalization now nearing Rs 2.5 lakh crore-mark.
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