Brokerages have been optimistic on the latest development that Zomato will acquire Paytm’s entertainment and ticketing business for ₹2,048 crore.
Shares of Zomato and Paytm gained to trade in the positive territory on Thursday’s early trade.
Domestic brokerage Motilal Oswal believed discussion around fair valuation for the business is “too premature,” in the context of Zomato’s scale. However, it has maintained buy rating on Zomato with a target price of ₹300, implying a 15 per cent potential upside.
For Paytm, the brokerage emphasised that the sale of its entertainment business would provide a financial boost, as the transaction will generate significant profits, allowing it to reinvest in other high-potential areas. Maintaining ‘neutral’ rating on the stock at a target price of ₹550, it said, “We estimate Paytm’s EBITDA to turn positive by FY27.”
Analysts of JM Financial said that Zomato would become the second largest entertainment ticketing platform in the country, behind only Bookmyshow post the deal.
Zomato intends to spin-off the entire going-out segment into a new app (district) that could help it better cater to the customers’ needs.
The brokerage has tweaked near-term estimates for going-out segment following management guidance to operate it at break-levels and likely cash outflow towards the proposed deal. “However, medium to long term estimates are raised to factor-in the positive impact of the acquisition. We continue to assign a target multiple of 75x and roll forward to Mar’27 EPS to derive a revised target price of ₹300 from ₹260 earlier),” it said.
The stock continues to be among JM Financial’s preferred picks in the listed Internet space, well-positioned to benefit from robust industry tailwinds across its B2C businesses.
Emkay Global has retained its buy call with a target price of ₹270 on Zomato, adding that the acquisition will bolster its going-out business.
Bernstein, which maintained an outperform rating on Zomato at a target price of ₹275, stated that the acquisition will expand the total addressable market (TAM) into the event ticketing business.
Other global brokerages such as Jefferies and Nomura have also maintained buy calls on Zomato at a target price of ₹335 and ₹280, respectively.
- Zomato, Paytm share price today: Track live stock movements here
