Zomato shares surged 7.65%, reaching a high of Rs 261.50 on the BSE. This week, CLSA raised its price target for Zomato from Rs 350 to Rs 353, citing the company’s rapid growth and Blinkit’s expanding market share, making it their top pick in India’s consumer sector.
Zomato shares surged by 7.65% on Thursday, reaching a high of Rs 261.50 on the BSE. This rise follows JPMorgan’s decision to raise its price target for Zomato from Rs 208 to Rs 340, highlighting growing optimism around Zomato’s quick commerce business, Blinkit.
Analysts are becoming increasingly positive about Zomato’s growth potential. CLSA recently raised its target price from Rs 350 to Rs 353, naming Zomato as their top pick in India’s consumer sector, driven by rapid growth and Blinkit’s expanding market share. Similarly, Bernstein has set a target price of Rs 275, recommending an ‘Outperform’ rating.
JPMorgan forecasts Zomato’s revenue to increase by 15-41% between FY25 and FY27. The brokerage praised the company’s leadership in transforming the retail consumer market through convenience-focused quick commerce. Zomato’s ability to scale across major metropolitan areas, after proving its model in the NCR region, was highlighted as a key factor for growth, especially through enhanced monetisation strategies.
JPMorgan also noted that with many Blinkit stores crossing key profitability thresholds, the business is set to scale faster than competitors, driving higher EBITDA. However, increasing competition from players like Flipkart, BigBasket, and Zepto may lead to intensified price competition in the next 12 months.
Equirus Securities maintained a ‘LONG’ position on Zomato, revising its target price to Rs 315, up from Rs 300. The note emphasized that as competition increases in overlapping regions, price wars could become more common.
According to CLSA, Zomato’s quick commerce division, Blinkit, is reshaping India’s retail landscape by flattening the distribution chain. This gives new brands better visibility and more competitive pricing, potentially reducing the advantages of established players like Marico and Hindustan Unilever. CLSA forecasts Blinkit will reach EBITDA and net profit positivity by FY25, contributing significantly to Zomato’s earnings by FY26.
The retail market is evolving, with modern retailers like DMart achieving better margins through aggressive discounting strategies, allowing them to pass savings on to consumers. However, in the traditional retail space, where margins are shared across various players, pricing flexibility is more limited. Quick commerce could disrupt this model, offering consumer goods companies a way to bypass some pricing controls and deliver better value directly to customers.
