Zomato's Blinkit Bet Pays Off: Quick Commerce Startup Now Zomato's Crown Jewel
When Zomato acquired Blinkit in 2022, little did it know that the quick commerce startup will surpass Zomato to become a more valuable company.?
Goldman Sachs analysts recently revealed that the perceived worth of Blinkit has surpassed that of Zomato's food delivery arm. They estimate Blinkit's value at Rs 119 per share, reflecting a $13 billion(Rs 1 lakh crore approx) equity valuation, which now exceeds the valuation of Zomato's food delivery business, valued at Rs 98 per share.
From once being viewed as a liability for Zomato to emerging as its flagship division, Blinkit's trajectory is one of remarkable turnaround. Zomato's acquisition of Blinkit, formerly known as Grofers, in 2022 was initially perceived by investors as a desperate move, leading to a 20 percent drop in Zomato's shares. Despite the initial skepticism, Zomato remained steadfast in its vision, and now, it seems that their optimism has been vindicated as Blinkit proves to be a significant asset in their portfolio.
Zomato Had Acquired Blinkit For $568 million (Rs 47,000 crore) In 2022
According to analysts at Goldman Sachs, Blinkit's implied valuation which skyrocketed to an impressive $13 billion(Rs 1 lakh crore approx has fetched a staggering 6X growth on a year-on-year (YoY) basis.
Blinkit has emerged as the largest segment for Zomato, comprising a significant portion of its total market capitalization. With Zomato's current market capitalization standing at approximately $20 billion(Rs 1.6 lakh crore), Blinkit alone contributes a substantial $13 billion(Rs 1 lakh crore) to this valuation. The company's other divisions, including Food Delivery, Hyperpure, and Dining Out, account for the remaining portion of the market capitalization.
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What Goldman Sachs Said About Zomato?
Goldman Sachs foresees potential for Zomato's valuation multiples to increase further, noting that Zomato boasts the highest EBITDA margin among global food delivery platforms. The brokerage has upheld its 'buy' recommendation on the stock and raised the price target on the food delivery aggregator to Rs 240 from Rs 170 previously.
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