Synopsis: Zomato's stock saw a nearly 8% increase due to rising confidence in its quick commerce business, Blinkit. JPMorgan raised its target price for Zomato from Rs. 208 to Rs. 340, reflecting its belief in Zomato’s scalability across metros and improved monetization potential.
Zomato's stock witnessed a sharp rise of 7.65%, reaching a high of Rs. 261.50 on the Bombay Stock Exchange (BSE) after multiple brokerage firms upgraded their price targets.
The surge was driven by growing optimism about the company's quick commerce arm, Blinkit, and Zomato’s ability to maintain its leadership position in India’s evolving consumer landscape.
Zomato’s quick commerce business Blinkit is at the heart of these upgrades.
JPMorgan revised its price target by nearly 63% and raised forecasts for Zomato by 15-41% for FY25-27.
This upward revision is due to Blinkit’s ability to drive revenues through channel margins and ad spending, as well as improving store-level economics.
Additionally, the brokerage highlighted that Zomato’s deep penetration in key metro cities like NCR offers a solid foundation for future expansion and profitability.
Blinkit's growth has also attracted attention from CLSA, which adjusted its target price, citing the venture's potential to reshape India’s retail landscape by flattening distribution channels.
Competitive Landscape and Market Disruption:
As competition in the quick commerce sector intensifies with players like Flipkart and BigBasket entering the space, Zomato is ramping up its expansion plans.
CLSA forecasts that Blinkit will achieve profitability by FY25, contributing to a significant portion of Zomato’s overall earnings by FY26.
Meanwhile, firms like Equirus expect Blinkit’s store network to continue growing, while warning of potential pricing pressures as new entrants ramp up their operations.
In conclusion, Zomato’s stock is riding a wave of bullish sentiment driven by the strong performance of Blinkit and its potential to disrupt traditional retail models in India.
With multiple brokerage firms upgrading their target prices, the consensus is that Zomato is well-positioned for long-term growth, particularly in the quick commerce segment.
While challenges from competitors exist, Zomato’s scale and market reach provide it with a strategic edge in the Indian consumer space.
Disclaimer: This article is for informational purposes only and should not be considered as financial or investment advice. Please consult a qualified financial advisor before making any investment decisions.
