Blinkit more valuable than Zomato's food delivery business: Goldman Sachs
Goldman Sachs, a leading brokerage firm, has revealed that the value of Zomato's quick commerce venture, Blinkit, has exceeded its main food delivery business. The firm continues to endorse a 'buy' recommendation for Zomato's stock and has raised the price target from ₹170 to ₹240. Goldman Sachs asserts that the market is yet to fully acknowledge Zomato's growth and profitability potential in the online grocery sector.
Goldman Sachs now values Blinkit at ₹119 per share
Goldman Sachs now values Blinkit at ₹119 per share, giving it an equity valuation of $13 billion. This is higher than Zomato's food delivery business, which is valued at ₹98 per share. Zomato acquired Blinkit in 2022 for less than $600 million. The Gross Order Value (GOV) for Blinkit is nearly 50% higher than Goldman Sachs's estimate from a year ago, indicating impressive growth and profitability for the quick commerce venture.
Blinkit will see CAGR of 53% in GOV between 2024-2027
Goldman Sachs predicts that Blinkit will see a compound annual growth rate (CAGR) of 53% in its GOV between 2024 and 2027. This growth is expected to contribute to a 32% adjusted revenue CAGR for Zomato overall. The firm also anticipates further re-rating of Zomato's valuation multiples as it continues to improve profitability, particularly in the quick commerce sector. Goldman Sachs highlights that Zomato has the highest EBITDA margin among global food delivery platforms and expects this trend to continue.
