Zomato shares zoom 19% on Blinkit’s stellar performance
Shares of Zomato hit an all-time high of ₹278.70 on the NSE after posting stellar results for the quarter ended June 2024. Majority of brokerages have been favourable on the stock and raised target prices aggressively.
For instance, CLSA has maintained its ‘Buy’ call on Zomato but raised the target price to ₹350 from ₹248 earlier.
Shares of Zomato closed higher by 12.24 per cent on the NSE at ₹262.74. On the BSE, it ended 11.98 per cent higher at ₹262.15. Market-capitalisation of Zomato zoomed to ₹2.20 lakh crore.
Elara Capital and Motilal Oswal have also increased the target price to ₹320 and ₹300, respectively. Motilal’s report noted that Zomato clocked strong quarter revenues clocked by Hyperpure/ Blinkit and reiterated ‘buy’ rating. It said that the company’s food delivery business is on a firm footing. “Blinkit, however, notoriously defies any attempts to value the stock fairly, due to its feisty growth and the disruptive and evolving nature of quick commerce,” it added.
Nuvama Institutional Equities disclosed that the company delivered better-than-expected performance on all counts. The brokerage maintained ‘buy’ rating on the stock with a revised SotP-based target price of ₹285 (from ₹245) based on a valuation rollover to Sep-26E. It values the food delivery business at $14 billion and Blinkit at $13 billion.
Axis Securities initiated coverage on Zomato with a ‘buy’ recommendation at a target price of ₹280. Observing quick commerce exhibits lavish market potential, the brokerage has estimated Blinkit’s GOV to see a CAGR of 38 per cent over FY24-30E to touch $ 10.5 billion.
Global brokerages Citi and Goldman Sachs have also raised the target price to ₹280, while maintaining Buy calls.
Analysts of Emkay Global Financial have revised FY25-27 EPS estimates downward marginally to 4 per cent, factoring in the Q1 performance and the aggressive store expansion plans for Blinkit. “We maintain Buy on Zomato, raising Jun-26E target price to ₹270/sh on SOTP basis,” Emkay’s report said.
Brokerage JM Financial mentioned that Zomato continues to be one of its preferred picks in the listed internet space as it is well-positioned to benefit from robust industry tailwinds for hyperlocal delivery businesses. Zomato remains on track to deliver over 20 per cent GOV growth in the food delivery business over the medium term and achieve 4-5 per cent adj. EBITDA margin guidance over the next few quarter, according to JM Financial. “We raise earnings by 2-15 per cent over FY25-27 and raise our Sep’25 target price to ₹260 from ₹230 earlier,” it added.
Morgan Stanley has maintained an overweight rating on the stock at an increased target price of ₹278, Bernstein has maintained outperform on Zomato at an increased target price of ₹275, and UBS has maintained buy call at target price of ₹260.
Meanwhile, Macquarie has maintained an ‘underperform’ rating on Zomato and set the target price at ₹100.
.