BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Growing internet penetration, rising consumption and urbanisation have driven online delivery adoption in India. A large internet user base (one billion by CY25E according to Redseer) combined with early stage of adoption – 9% of the population using internet (versus 36% for China/50% for the U.S.) – should ensure a long runway to growth.
We expect India's food delivery market to clock a rapid 19% compound annual growth rate over FY23-25 (versus slowing growth in other markets) fueled by growth in the number of transacting users and order frequency. This should lead to a higher share of online food ordering (24% by FY25E from 13% in FY21).
Zomato Ltd. is a dominant player in the industry and we forecast the company to report 29% revenue CAGR over FY23-25. Though management expects it to be profitable latest by Q2 FY24, we believe the company should breakeven during FY25.
We view the acquisition of Blinkit as an additional risk and high attrition at senior management level remains a concern.
We expect strong growth to be complemented by the company turning profitable over FY25, despite elevated competitive intensity.
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