JM Financial Initiates Buy Call On Zomato For Target Of Rs 170
Brokerage firm JM Financial has initiated buy coverage on the newly listed Zomato for a target price of Rs 170, indicating an upside gain of 30 per cent from Wednesday's closing price. In a report titled "Zomato| Conveniently positioned to deliver", JM Financial said, "Zomato is poised to leverage the decadal growth opportunity in India's on-demand hyperlocal delivery ecosystem."
The company is a market leader in the food delivery vertical and could explore adjacent growth opportunities, JM Financial said.
"Our proprietary analysis of global peers indicates that profitability would be the natural outcome of economies of scale; the absence of the latter could have a detrimental impact on long-term viability, as seen for a few global peers. Robust industry tailwinds such as improving tech penetration and rising number of digitally native millennials/GenZ within the income share are likely to support the company's growth ambitions," JM Financial said in a report.
JM Financial has valued Zomato using 11 times enterprise value to adjusted sales multiple to better factor in its long-term growth potential. However, key downside risks to target price include slower-than-expected penetration of tech-enabled transactions in India and a sharp rise in competitive intensity in the near term, the brokerage firm added.
Zomato made a stellar market debut last week wherein its market value moved above Rs 1 lakh crore mark. The shares opened at Rs 116, a premium of more than 50 per cent on the National Stock Exchange over the issue price of Rs 76. Zomato has advanced as much as 94 per cent over its IPO price.
The IPO of the online food delivery service provider was the second largest IPO after the Rs 15,199.44 crore Coal India share sale way back in October 2010. It is also the first Indian mega startup to go public, paving the way for the other leading digital companies such as Paytm, Flipkart and Ola to take the IPO route.
As of 2:50 pm, Zomato shares were trading 7 per cent higher at Rs 140, outperforming the Nifty which was up 0.5 per cent.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
-
Talking Points This Week: AI Cash Burn, A Tiger Comeback And An India That Still Finds Its Own Path
India is not immune to higher oil or tighter global liquidity, yet its earnings base is broader, its domestic policy levers are still available.
-
Foreign Investors Own Half Of HDFC Bank and ICICI Bank. An LTCG Cut Could Matter Most Here
Foreign portfolio investors have US$115 billion parked in HDFC Bank, ICICI Bank. If the government cuts long-term capital gains tax, Jefferies says returning foreign money could land here first.
-
'Never Seen This Level Of Negativity': Sandeep Tandon Says The Next Rally May Be Closer Than You Think
Veteran investor Sandeep Tandon says foreign selling is easing, large-caps are due a comeback and mid-caps are crowded, while he turns positive on gold, power and pharma this Diwali.
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
-
The Economic Imperative: Analysing The Material Driving Force Behind India-Canada Strategic Reset
This economic complementarity is further reinforced by deep institutional investment ties and talent mobility, which form the bedrock of the bilateral framework.
-
Medicine Pricing: Where Must Profit Stop?
India must confront excessive margins, hidden incentives and regulatory gaps that threaten the integrity of medicine.
