Shares of Zomato Ltd plunged 9 per cent in Tuesday's trade, taking its year-to-date fall to 20 per cent. The stock has entered the bear grip following less-than-expected December quarter results. A few analysts cut their target prices on Zomato. The target prices for the online food aggregator post Q3 results vary from Rs 140 to Rs 400.
Shares of Zomato fell 9 per cent to Rs 219 on BSE. IIFL Securities downgraded the stock to 'ADD' with a target price of Rs 250 from Rs 300 earlier, as it expects competition to first peak out in 2025 before becoming more constructive on this secular growth story.
Nuvama said Blinkit dark store additions are outpacing expectations, driving faster growth. That said, profitability may face short-term delays due to higher upfront costs for store openings, it said. "We believe this bunching up of cost for dark store addition shall hurt profitability in the short-term, but shall ultimately lead to bunching up of profitability in future quarters as these stores mature. Maintain ‘BUY’ with a revised SotP-based target price of Rs 300 (earlier Rs 325) as we rollover to FY27 estimate," it said.
CLSA suggested a target price of Rs 400, BofA Securities Rs 375, UBS Rs 320 and Nomura India Rs 290. Nomura India said key monitorables for Zomato would now be Blinkit’s gross order value (GOV) market share and continuation of positive contributing margin.
Kotak Institutional Equities said near-term losses notwithstanding, Blinkit remains the best positioned to capitalise on the rising quick commerce penetration. It retained 'Buy' on Zomato with a revised fair value of Rs 275 from Rs 305 earlier.
MOFSL sees short-term pain but long-term gain. For Q4FY25, it expects revenue and Ebitda to grow 65.8 per cent and 70.5 per cent YoY. It suggested a target price of Rs 270 and maintained its 'Buy' rating on the stock.
Macquarie said it regards Zomato as an efficient quick commerce and food delivery platform, but for the shares we see limited margin of safety. It sees rising competition in quick commerce denting consensus forecasts. It said its DCF-based price target of Rs 130 implies 55 times FY27 PE (adjusted for treasury income).