Rentomojo Ltd.

Our reasoning

RentoMojo is well positioned for a multi-year growth phase, supported by rising adoption of rental-led consumption, an expanding subscriber base and increasing penetration of furniture and appliance rentals. We expect Revenue/EBITDA/PBT to grow at a CAGR of 40%/47%/64% over FY26–28E, driven by strong customer additions, higher rental penetration, operating leverage and improving asset utilisation. The company added new subscribers at a 30% CAGR over FY24–26, while gross items ordered grew at 37% CAGR, reflecting increasing platform traction. Its focus on offline stores is expected to strengthen customer experience and trust, with the store network reaching 89 outlets as of Q1FY27.FY26 PAT of ₹104.3 crore included a ₹36.6 crore deferred tax credit, making reported earnings less representative of underlying profitability. Accordingly, we focus on PBT to assess the company’s earnings trajectory. At CMP of ₹578, the stock trades at ~56x FY26 P/E, or ~86x excluding the deferred tax benefit. While the valuation remains premium, RentoMojo’s differentiated rental model, scalable platform and high entry barriers support its long-term growth potential. We value the company at 39x FY28E EPS of ₹17.53, arriving at a target price of ₹683, implying an upside of 18%.