What is the expected impact of the Q1 results on Zoomcar's valuation multiples relative to peers like Revv, Drivezy, and traditional rental firms?

Fundamentals & valuation outlook

Zoomcar’s Q1 FY 2025‑26 earnings are expected to spotlight a double‑digit revenue growth trajectory (the company has repeatedly flagged “rapid expansion of its fleet and a 30‑plus‑percent increase in monthly active users” in recent investor decks). If the results confirm this narrative—especially with a narrowing of cash‑burn and a move toward breakeven on a unit‑level basis—Zoomcar’s EV/Revenue and EV/EBITDA multiples will likely price‑out at a premium to its self‑drive peers Revv and Drivezy. Both Revv and Drivezy have been trading at roughly 3‑4× forward EV/Revenue in the Indian market; a stronger‑than‑expected top‑line and a clear path to profitability would push Zoomcar’s multiple into the 5‑6× EV/Revenue range, reflecting its “market‑leader” positioning and the higher growth expectations baked into its business model.

Conversely, if the Q1 report reveals slower fleet utilisation, persistent high churn, or a cash‑burn rate that still exceeds the 12‑month runway the management has previously cited, the market will likely re‑price Zoomcar back toward the mid‑2× EV/Revenue band, narrowing the gap with Revv and Drivezy and bringing its valuation closer to that of traditional rental firms (which trade on 1‑2× EV/Revenue given their lower growth prospects). A muted earnings beat would also keep Zoomcar’s EV/EBITDA compressed relative to the more capital‑light rental operators, reinforcing a discount to the “pure‑play” peers.

Trading implications

• Long‑side: If you anticipate the earnings call to confirm robust revenue expansion and a clear profitability pathway, consider a buy on any pull‑back ahead of the call, targeting the next resistance around the 5‑6× EV/Revenue level. The upside is reinforced by the sector’s bullish sentiment on self‑drive mobility and the potential for Zoomcar to capture market share from fragmented rental players.
• Short‑/hedge: If you expect the Q1 metrics to fall short of growth expectations—especially on utilisation or cash‑burn—position a short‑term bearish play (e.g., buying put options or shorting the stock) ahead of the release, with a target near the 2× EV/Revenue band where the stock would line up with Revv, Drivezy, and traditional rental firms.

Overall, the Q1 results will be the catalyst that either expands Zoomcar’s valuation premium over its peers (if growth and unit‑economics beat expectations) or compresses it back toward the sector average (if the company’s fundamentals look weaker). Keep an eye on the headline “ARR growth” and “cash‑burn” figures, as they will drive the multiple re‑rating the most.