Global brokerage firm CLSA has identified Zomato and Persistent Systems as potential multibagger stocks, indicating a significant growth over the next few years. While Persistent Systems is expected to more than double or even triple in five years, CLSA sees Zomato’s Quick Commerce arm, Blinkit, as a key long-term growth driver.
Zomato: Blinkit’s growth to drive long-term value
CLSA also included Zomato in its multibagger list, seeing Quick Commerce as one of the best multi-year growth stories in the Indian consumer market.
Salesperson Damian Dwerryhouse noted, “We see Quick Commerce as one, if not the best, multi-year growth story in Indian consumer and arguably the market.”
While Zomato’s next two quarters could be impacted by store expansions, Blinkit is expected to turn profitable by the September quarter and grow strongly from there.
ALSO READRailways stocks like RVNL, RailTel in focus because…
According to the CLSA report, “If India is considering the structural growth opportunity the market believes, consumption is a key theme, and Quick Commerce is still in its infancy. Surely, the current pullback in Zomato is an opportunity to re-appraise the longer-term investment opportunity vs weak quarterly results.”
The online food tech major, Zomato’s share price tells a different story. It surged nearly 4% in the last month but remains 14% lower over six months. However, the food delivery giant has delivered a 36% gain over the past year.
Persistent Systems: Aiming for $30 billion market cap by FY31
According to the CLSA report, Persistent Systems is on a strong growth trajectory, currently generating $1.43 billion in revenue with an EBIT margin of approximately 15%. The company has set an goal of reaching $ 5 billion in revenue by FY31, with further margin expansion.
Analyst Sumeet Jain in the CLSA report highlighted the stock’s potential, stating, “I believe Persistent Systems (PSYS IN) can easily more than double or probably 3X in the next five years. Given such stocks can trade at 5-6X EV/Sales (currently at 6.5X), we believe PSYS can be a $30Bn market cap stock by FY31.”
ALSO READSBI Life to announce FY25 interim dividend on February 28: 4 things you need to know at this hour
CLSA has also increased its FY25-27 EPS estimates by 1% to 2%,
» Read More
