Recently, the Zomato CEO became the first in India to take delivery of the new Aston Martin DB12. And even as the furore continues on his Aston Martin buy, HSBC continues to maintain Buy on the Zomato stock
HSBC’s recent report on Zomato reveals an optimistic outlook for the company, with key adjustments to order growth rates and revenue projections. The report indicates a revised target price of Rs 200, implying a substantial 25% upside from the previous target of Rs 163.
The report raises the order growth rates for Blinkit to 25.4% from the previous 21.4% for the fiscal years 2024 to 2027. Additionally, the report adjusts the gross order value (GOV) growth to 27.3% from the earlier projection of 23.2% for the same period.
Over the next three years, HSBC predicts that total advertising spend in India will align with the nominal GDP growth rate, projecting an increase from the current USD 13 billion to approximately cUSD 18 billion by the fiscal year 2027.
Within the overall advertising spend, the share of digital advertising is expected to rise from the current 38% to 44% by fiscal year 2027, according to the report. There is a prevailing industry sentiment, sourced from the IPSOS State of Marketing Report, suggesting the potential for an even higher share.
The majority of digital spend (80%+) is currently distributed across search platforms (such as Google), video platforms (like YouTube), and social media channels (e.g., Facebook, Instagram).
While other platforms, particularly e-commerce, currently attract a 15% share of digital spend, the report anticipates Zomato to rise to 18% by fiscal year 2027.
The report emphasizes that digital ads on e-commerce or quick-commerce platforms like Blinkit offer enhanced tracking capabilities compared to other platforms like social media. As a result, spenders are expected to continue shifting their advertising budgets in favor of these easily traceable and effective platforms.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
