Growth prospects and re-rating of food aggregator Zomato are expected to be reflected on the Info Edge stock, which owns a 26 per cent stake in the company. HSBC believes that Zomato’s expansion of food delivery business would add 27 per cent to the expected valuation of Info Edge with around a four-fold rise in Zomato’s valuation to $3.6 billion. This, in turn, provides further upsides to the Info Edge stock.
Despite losses of $294 million in FY19 due to rising investments in the food delivery business, the key takeaway is the strong growth lever for food delivery given India’s lower