Sensex Falls 1,200 Points, Nifty Below 16,950 After Hawkish Fed; Zomato Down 10%
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Buy Zomato, target price Rs 175: Jefferies
Here are some highlights of what the brokerage said:
–Growth contrast through pandemic shows interesting trend for Zomato vs peers
–See a case for India premium to sustain as seen in other sectors, although short listing history makes it difficult
–Ascribing 1-1.5x of delivery GMV (keeping other parts constant), levels of Rs 70-95 appear to be attractive
–Base case target price unchanged at Rs 175 at least for now
–Despite correction, Zomato valuation premium stays high compared to global peers given all-round correction
–Difficult to forecast where this settles
–Expect premium valuation to sustain given long runway for growth for food services, share gains by delivery platforms, market structure (two-player market) etc
–Debate remains on what the right premium is, that is key challenge given short-listing history
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Read More: Sensex Falls 1,200 Points, Nifty Below 16,950 After Hawkish Fed; Zomato Down 10%