Bernstein points out that initial assumptions about QC, such as it being limited to ‘top-up’ orders instead of large baskets, appealing only to metros rather than Tier 2 cities, and catering mainly to wealthier consumers, have consistently been revised upward each quarter. The sector has evolved significantly, with QC gaining traction across various consumer segments.
The brokerage emphasizes that Zomato remains at the forefront of this evolving ecosystem, prioritizing long-term leadership over short-term profitability. Zomato’s strategic positioning reinforces its role as a key player in the QC economy.
On Friday, at 12:01 pm, the scrip was trading 2% lower at Rs 278.2 on BSE. However, the stock has surged 123% on a year-to-date basis, and 184% in the last year.
Earlier brokerage firms like UBS, Jefferies, and JPMorgan have also expressed their confidence in the stock given its past performance and future prospects.
On Wednesday, global brokerage firm UBS retained its buy rating on the stock with a target price of Rs 320 on optimism on the company’s growth stating that the industry volumes are growing at about 2.5% on a month-on-month (MoM) basis in Aug ’24, which has been adjusted for the number of days.Earlier in the month, JPMorgan had hiked the stock’s target price to Rs 240 from an earlier Rs 208 while maintaining an overweight rating on the same stating that Zomato is spearheading rapid retail consumer transformation via convenience and selection-focused Quick Commerce. The company is going deeper across all Metros having proven the model in NCR.Meanwhile, Jefferies had given a base case target of Rs 335 for Zomato believing that Zomato has taken some interesting initiatives in the food delivery that will strengthen the franchise and hence, expect a 20% CAGR in delivery revenue over FY 24-27.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
