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Buy Zomato; target of Rs 175: Choice Equity Broking

Buy Zomato; target of Rs 175: Choice Equity Broking
October 12
16:24 2021

Choice Equity Broking is bullish on Zomato has recommended buy rating on the stock with a target price of Rs 175 in its research report dated October 11, 2021.

Broker Research

October 12, 2021 / 01:30 PM IST

HDFC Securities research report's outlook and valuations: 500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar.”” title=”HDFC Securities research report’s outlook and valuations:  “The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar.”” width=”100%” height=”auto” >

HDFC Securities research report’s outlook and valuations:  “The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar.”

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Choice Equity Broking’s report on Zomato

Zomato Ltd., founded in 2008 is an online food delivery company. Zomato’s technology app connects the customers, restaurant partners and the delivery partners. The customers use the app to search restaurants, order food, book a table, etc. The restaurant partners are provided with marketing tools which enables them to acquire customers and are also provided with efficient delivery service. While the delivery partners get flexible earning opportunities. Apart from all these, it operates Hyperpure, which supplies high quality ingredients and kitchen products to restaurant partners.

Outlook

The food services industry is massive, which provides a food aggregator company like Zomato with immense opportunities to grow. Considering the long term growth potential, we assign a “BUY” rating on the stock with a target price of Rs. 175 per share.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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