In a development that underscores the rapidly changing dynamics of the online delivery sector, Blinkit, a company specializing in hyper-local deliveries, has reportedly eclipsed the core food delivery business of Zomato in terms of market valuation. This update comes from a recent analysis conducted by the financial giant Goldman Sachs, positing Blinkit’s value at a notable Rs 119 per share, bringing its total equity valuation to an impressive $13 billion.
This surge in valuation marks a significant milestone for Blinkit, as it now outshines the valuation metrics of Zomato’s food delivery wing, currently standing at Rs 98 per share. The shift is attributed to the robust performance of Blinkit post its acquisition by Zomato in 2022 for a deal valued at $568 million. Since then, the subsidiary has seen a dramatic increase in valuation, thanks to improved business metrics and service performance.
Delving deeper into the figures presented by Goldman Sachs, Blinkit’s valuation has seen a remarkable rise from their initial $8 billion estimate to the current $13 billion. This upgrade has been influenced by the projection that Blinkit’s gross order value (GOV) will exceed previous estimates by about 50 percent, an indicator of the company’s expanding market reach and operational growth.
In their market note, Goldman Sachs confirmed, “Blinkit’s implied valuation in our Zomato’s sum of the parts (SOTP) is just about $13 billion now, which is up from $2 billion in March 2023. This is with per share implied value of ₹119 surpassing that of food delivery, which is at ₹98, for the first time.”
Adding to the optimism for investors, Goldman Sachs has decided to retain its ‘buy’ rating on the stock, simultaneously bumping up the price target from Rs 170 to Rs 240. This bullish stance is reflective of the consensus among analysts, with a majority of the 28 analysts who cover Zomato suggesting a ‘buy’ rating. Their outlook is drawn from the assertion that the market is not fully appreciating Zomato’s expansion trajectory and long-term profitability, especially within the online grocery segment, which is poised for significant growth.
The report from Goldman Sachs implies strong confidence in the strategies deployed by Zomato and Blinkit. The companies have been working towards harnessing the potential of the online grocery market, which is a rapidly expanding segment of e-commerce. By offering swift and efficient hyper-local delivery services, Blinkit is tapping into the convenience-driven purchasing patterns of consumers, a trend only expected to inflate in the upcoming years.
In the broader context, this valuation leap signifies a larger trend within the online delivery industry, wherein diversified services are becoming more valuable. Companies that offer various products and services through their delivery platforms are in a stronger position to capture market share and drive profitability by meeting a wider array of customer demands.
The food delivery aggregator’s focus on online groceries also illustrates an evolving consumer preference, with heightened demand for prompt and reliable delivery services for everyday essentials. The coupling of Zomato’s food delivery expertise with Blinkit’s hyper-local delivery prowess appears to be setting a new standard in the industry, enabling them to offer a comprehensive suite of services that go beyond mere restaurant deliveries.
In conclusion, Blinkit’s freshly assessed market value surpassing that of Zomato’s core food delivery service is a testament to the changing landscape of the sector and the synergistic potential of strategic acquisitions. The recalibrated outlook from Goldman Sachs not only reinforces the promise held by Blinkit but also casts a spotlight on the latent opportunities within Zomato’s expansive portfolio, suggesting a robust future for the integrated platform and its stakeholders.
