Synopsis : Zepto is preparing for its stock market debut, but Jefferies believes investors should be cautious when comparing it with Blinkit and Instamart. The brokerage highlights differences in disclosures, pricing strategy, profitability metrics, and operating structure, while noting that Zepto still has work to do before achieving sustainable profits.
India's quick commerce sector could soon welcome another major listed player.
After Blinkit and Instamart captured investor attention, Zepto is now preparing for its stock market debut. However, according to international brokerage Jefferies, comparing Zepto with its listed rivals is not as straightforward as it may seem.
The brokerage believes that while Zepto has delivered impressive growth, investors need to closely examine its business model, disclosures, profitability metrics, and expansion plans before drawing direct comparisons with peers.
Why Zepto's Metrics Look Different
One of the first observations made by Jefferies relates to the company's disclosures in its Draft Red Herring Prospectus (DRHP).
The brokerage noted that Zepto reports several operational metrics differently from listed competitors such as Blinkit and Instamart.
According to Jefferies, "its DRHP disclosures differ meaningfully from those of listed peers (Eternal & Swiggy)."
Instead of reporting commonly tracked metrics such as Monthly Transacting Users (MTU), Net Order Value (NOV), and Contribution Margin (CM), Zepto has disclosed metrics including Net Revenue Value (NRV), Annual Transacting Users (ATU), and supply chain costs.
Jefferies further pointed out that "reported revenue reflects a wholesale-led structure, diverging from the take-rate framework."
As a result, investors may find it difficult to make direct apples-to-apples comparisons between Zepto and its listed peers.
Every Day Low Pricing Strategy Driving Growth
Zepto has positioned itself differently within the quick commerce space through its Every Day Low Pricing (EDLP) strategy.
The company focuses on offering products at competitive prices to encourage higher purchase frequency and customer retention.
Jefferies stated, "Zepto is a scaled Q/C player with a clear EDLP (Every Day Low Pricing) led positioning that mirrors DMart's value-first retail philosophy."
The brokerage estimates that Zepto currently commands approximately 35% of total order share among the top three quick commerce players.
On a Net Order Value basis, excluding advertising revenue, its market share is estimated at around 27%.
However, the company continues to generate lower average order values than competitors.
Jefferies estimates Zepto's net average order value at approximately Rs 360, compared with around Rs 500-525 for Blinkit and Instamart.
Losses Are Improving, But Profitability Remains Distant
Profitability remains one of the biggest questions surrounding Zepto's IPO.
According to Jefferies, the company has made meaningful progress in reducing losses per order.
Adjusted EBITDA loss per order improved to Rs 79 in FY26 and further narrowed to Rs 59 during the fourth quarter of FY26.
Despite the improvement, losses remain substantial.
Jefferies noted that "losses remain elevated, despite trending down."
The company reported an adjusted EBITDA loss of nearly Rs 5,000 crore in FY26, while losses during the fourth quarter alone stood at approximately Rs 1,240 crore.
The brokerage believes investors will continue to focus on whether operational leverage can eventually offset the company's aggressive growth investments.
Expansion Plans Remain Aggressive
Zepto plans to raise around Rs 8,000 crore through its proposed IPO.
According to Jefferies, a significant portion of the proceeds will be directed toward expanding its dark store network and funding lease-related obligations over the next four years.
The company appears committed to maintaining an aggressive expansion strategy as competition intensifies across India's fast-growing quick commerce market.
What Investors Should Watch
Jefferies believes Zepto's growth trajectory remains impressive, supported by its value-focused proposition and growing market share.
The brokerage stated that "Zepto has delivered consistent growth driven by its EDLP proposition."
However, achieving profitability remains the key challenge.
The report highlights that sustainable profits in quick commerce require a combination of scale, operational efficiency, strong order density, and disciplined cost management.
As Zepto prepares for its public market debut, investors are likely to closely monitor whether the company can successfully convert rapid growth into long-term earnings and cash flow generation.
Conclusion
Jefferies' analysis suggests that Zepto has built a meaningful presence in India's quick commerce sector through its low-price strategy and rapid expansion. However, differences in reporting metrics, lower average order values, and continued losses make direct comparisons with Blinkit and Instamart more complex. While growth remains strong, the path to profitability will likely be the most important factor determining investor sentiment ahead of and after the IPO.
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