Brokerage Houses on Zomato Stock:The stock of food delivery aggregator Zomato proved to be a multibagger in the year 2024 and was among those giving more than 100 percent returns within a year. With the rise in the stock, its market cap also increased and it has now been included in the Sensex 30 index i.e. frontline stocks. Will the 2024 rally continue this year too or is it time to be alert about this stock? The brokerage house has given a mixed view on this stock in its latest report.
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Jefferies
Rating : Hold
Current price: Rs 252
Target price: Rs 275
Brokerage house Jefferies has downgraded the rating on Zomato shares to Hold and given a target price of Rs 275. The brokerage house says that competition in quick commerce is increasing rapidly. Concerns remain regarding profitability. After the sharp rally last year, this year could be a year of consolidation. Due to competition, more discounts can be given by the company. Concerns remain regarding mid-term profitability. The brokerage house has reduced consolidated EBITDA estimates for FY26-27 by 12-15%.
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morgan stanley
Rating: Overweight
Price: Rs 252
Turret Price: Rs 355
Brokerage house Morgan Stanley has given overweight rating on Zomato shares and has set the target price at Rs 355. That means the share can give 41 percent return from the current price. The brokerage house says that it can be the top pick in the Indian internet space. The growth visibility of the company has improved and profitability is expected to continue in future also. Despite increased competition in this space, revenue is expected to grow at a CAGR of 33% during FY25-27e. The company has a proven track record in terms of profitability. Whereas the market share in terms of monthly active users is increasing.
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bernstein
Rating: Outperform
Price: Rs 252
Turret Price: Rs 335
Brokerage house Bernstein has given outperform rating on Zomato shares and has made the target price Rs 335. That means the share can give 33 percent return from the current price. The brokerage says leadership position in food delivery and quick commerce, strong user acquisition, expansion of TAM through dine out and other growth options are positive factors.
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The brokerage says adjusted revenues have grown at an impressive 53% YoY (40% YoY for the last 8 consecutive quarters). Blinkit achieved adjusted EBITDA breakeven in March 2024, while delivering -0.1% adjusted EBITDA margin in Q2FY25. The brokerage believes that Zomato will focus on gaining market share within quick commerce through its dark store expansion strategy of 1000 dark stores by FY 2025 and 2000 dark stores by the end of 2026.
(Disclaimer: The advice to invest in stocks has been given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)
