4 explanation why Morgan Stanley believes Everlasting shares can rally as much as Rs 320

With Q4 earnings and the restricted threat of additional fairness dilution already priced in, world brokerage Morgan Stanley has reiterated its bullish stance on Everlasting (previously Zomato), naming it its prime decide within the meals supply and fast commerce house, with a goal worth of Rs 320 on the inventory.

The goal worth displays the corporate’s market management, sturdy stability sheet, favorable risk-reward profile, and improved value construction.

In its report, Morgan Stanley stated: “We expect Everlasting affords (a) market management in each meals supply and fast commerce; (b) a superior value construction driving wholesome unit economics versus friends; (c) a stronger stability sheet than friends, limiting the danger of additional fairness dilution; and (d) favorable risk-reward – with a possible ground at Rs 200–220.”

The brokerage additionally revised its long-term outlook for the Fast Commerce (QC) phase, projecting India’s QC Whole Addressable Market (TAM) to achieve US$57 billion by 2030, up from its earlier estimate of $42 billion.

This improve is pushed by faster-than-expected buyer additions, rising city-level adoption, and a optimistic shock in QC Gross Order Worth (GOV), main Morgan Stanley to imagine that the general TAM will broaden, supported by broader metropolis and family/MTU penetration by 2030.

When it comes to financials, Morgan Stanley maintained its assumptions for the meals supply enterprise over FY26–FY28 however raised margin estimates for the phase. It famous that the class has seen sturdy investments under the contribution margin line, that are anticipated to translate into improved working leverage.The brokerage additionally elevated its QC GOV assumptions by 9–11% for FY26–28, citing the rising trade TAM and adjusted EBITDA loss margins peaking in Q4. Because of this, it now initiatives greater adjusted EBITDA for FY26.Nonetheless, the report additionally cautioned that on account of intense competitors, margin enchancment is predicted to be extra gradual, with good points extra more likely to materialize in FY27E and FY28E adjusted EBITDA.

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Morgan Stanley reaffirmed its view that Everlasting is well-positioned to dominate a big revenue pool within the medium time period, including that “we’ve got made no materials modifications to FY31 estimates.”

The agency additionally outlined a number of near-term catalysts for the inventory, together with sustained or improved QC GOV progress and regular enhancement in meals supply unit economics, pushed by each higher monetization on the client aspect and better absorption of mounted prices.

Moreover, it highlighted the stabilization or non-worsening of aggressive dynamics over the following 3–6 months, which may probably result in a re-rating of the complete phase, together with Everlasting.

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Importantly, Morgan Stanley sees a possible ground at Rs 200–220 by March 2026.

As of round 2 p.m. right now, shares of Everlasting have been buying and selling flat at Rs 240.05 on BSE.

(Disclaimer: Suggestions, options, views and opinions given by the specialists are their very own. These don’t signify the views of The Financial Instances)