In the brokerage's view, the long-term investment outlook for the stock remains intact and the recent correction in stock price provides an opportunity to own the market leader in the Indian hyper-local e-commerce space.
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Given the increased competitive intensity in quick commerce, path to profitability for all incumbents has been delayed. However, we think that this fast ramp-up of the dark store footprint is helping incumbents create an entry barrier into the segment; hence, shall be beneficial in the medium term.
In our view, the biggest risk for Zomato would be execution risk, given the high benchmarks set by the company in the past. In our view, the long-term investment outlook for the stock remains intact and the recent correction in stock price provides an opportunity to own the market leader in the Indian hyper-local e-commerce space.
We maintain Buy and revise our target price to Rs 310, from Rs 300 earlier, as we roll forward our DCF.
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