Zomato shares increased 7.7 percent in early morning trading today to ₹261.60 a share, following a slight decline in recent sessions. This increase followed the major brokerage company JP Morgan’s ₹208 to ₹340 share target price increase for the stock.
This is Zomato’s second-highest target price after CLSA revised it up to ₹353 per share earlier and kept its “overweight” rating on the stock.
The growth drive of Blinkit
With regard to the stock, JP Morgan’s updated target price suggests a 40% upside from its most recent closing price of ₹242 per share. Zomato’s Blinkit expansion, which has been successfully scaled across all major metro cities after proving its feasibility in the NCR region, is credited by the brokerage for its optimistic view.
The brokerage believes that Blinkit’s size will greatly increase advertising income and channel margins, which will increase monetization. Furthermore, it stated that better store-level economics could significantly boost the company’s EBITDA outlook.
JP Morgan thinks Blinkit has the potential to upend e-commerce as well as contemporary trade. The brokerage has increased its FY25–27 projections by 15% to 41% as a result. It has also taken into account a broader “Going Out” business, which now integrates Zomato’s recently acquired ticketing enterprise with core dining.
In contrast, Zomato has been identified by CLSA as its top consumer choice in India because of its quick growth and Blinkit’s growing market share. According to the brokerage, Zomato stands to gain the most from the shift in India’s supply chain that rapid commerce brings about. According to CLSA, Blinkit is expected to turn a profit in FY25.
It pointed out that Blinkit’s profitability is still rising in spite of the company opening additional locations, raising hopes that it may surpass Zomato’s meal delivery business on its own.
The brokerage has increased its Zomato shares target price but decreased its profit projections for FY26 by up to 12 percent in order to take into consideration the company’s acquisition of Paytm’s ticketing division.
Zomato’s quick-commerce division, Blinkit, added 113 new shops in Q1FY25, while reporting an adjusted EBITDA loss of ₹3 crore.
Morgan Stanley, Nomura, UBS, and Jefferies increase their targets for Zomato
Global brokerage firms have updated their Zomato shares target prices in recent months. UBS, for example, increased its target price from ₹260 per share to ₹320 per share. The company’s better-than-expected June quarter results, which were fueled by a stronger-than-expected 27 percent growth in gross merchandise value (GMV) for rapid commerce and good performance in food delivery, were the brokerage’s reason for this modification.
Additionally, Jefferies has maintained a “buy” rating on Zomato by adjusting its target price to ₹275 per unit.
Morgan Stanley has established a target price of ₹278 per share and reiterated its “overweight” rating on Zomato.
Furthermore, Nomura has maintained its “buy” recommendation for Zomato despite raising its target price from ₹225 to ₹280 earlier this month. It emphasized Zomato’s significant room for expansion and rising profitability in its rapid commerce and meal delivery businesses.
According to the firm, Q-commerce is expected to increase at an annual rate of 100 percent to 110 percent between FY25 and FY26. Zomato is expecting a +1.1 percent margin for FY25 and is getting close to EBITDA breakeven at -0.1 percent. Zomato presents a compelling investment opportunity in the Indian market due to its robust development trajectory and increasing profitability.
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