Goldman Sachs said that Blinkit is now worth more than Zomato’s meal delivery service

Goldman Sachs has revealed that the rapid commerce firm Blinkit—which Zomato bought in 2022—is now worth more than Zomato’s primary business of delivering meals.

Zomato’s main meal delivery operation is valued at Rs 98 per share, while Blinkit is valued at Rs 119 per share, for a total equity valuation of $13 billion, according to a recent report from the global brokerage firm.

In an April 4 study, Goldman Sachs raised its estimate of Blinkit’s worth from $8 billion to $13 billion. Higher gross order value (GOV) forecasts for Blinkit, which are now around 50% higher than predictions from a year ago, are what caused the surge, according to Goldman Sachs.

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TOPICS: Live Updates on the Lok Sabha Elections 2020 Wayanad Election General Elections 2024 Polling Locations Blinkit was acquired by Booth Zomato for $568 million in 2022. But as a result of its improved performance, Blinkit’s estimated value has increased to $13 billion, according to Goldman Sachs analysts.

This is a year-over-year (YoY) value growth of more than six times.

“We have observed that Blinkit’s implied valuation in our Zomato’s sum of the parts (SOTP) is approximately $13 billion at present, as opposed to $2 billion in March 2023. Additionally, the implied value per share is Rs 119 higher than food delivery, at Rs 98, for the first time,” according to Goldman Sachs.

From 2024 to 2027, Blinkit’s gross order value (GOV) is expected to expand at a compound annual growth rate (CAGR) of 53%, according to Goldman Sachs. Zomato’s total adjusted revenue CAGR of 32% is anticipated as a result of this increase.

Zomato’s predicted revenue CAGR is the highest among the Indian meal delivery and internet startups covered by Goldman Sachs.

The firm believes there is still room for Zomato’s value to rise as it improves profitability—particularly in the fast-fashion industry.

Additionally, it was noted that Zomato has the largest EBITDA margin of any meal delivery platform operating globally. This trend is probably going to continue into the rapid commerce industry, where margins may even outpace those in the food delivery sector.

Goldman Sachs maintained its “buy” recommendation for Zomato’s shares and raised its target price for the meal delivery business from Rs 170 to Rs 240. Two-thirds of the 28 analysts that cover Zomato advise keeping the stock, while the remaining three advise purchasing it.