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Zomato’s food delivery gross order value (GOV) increased 57% year-on-year to Rs 20,206 crore but missed estimates, with a YoY growth rate of 17%, falling 1.8% below projections. Meanwhile, Blinkit reported a 27.2% QoQ increase in GOV but continued to bleed cash, with EBITDAM declining to -1.3% compared to -0.1% in Q2 FY25.
The company expects the losses in Blinkit to continue in the near term, due to aggressive store expansion. Zomato has set an ambitious target to expand Blinkit’s store count to 2,000 by December 2025, a year earlier than previously planned, signaling its intent to solidify its quick-commerce market position despite ongoing profitability pressures.
Brokerages responded with mixed reactions to Zomato’s performance. Nomura revised its target price to Rs 290 from Rs 320, citing near-term challenges in Blinkit, while Jefferies reduced its target price to Rs 255 from Rs 275.
Nuvama and Kotak Equities set new targets at Rs 300 and Rs 275, respectively. UBS maintained its Rs 320 target price with a ‘buy’ rating, while Macquarie reiterated its ‘underperform’ rating and slashed its target to Rs 130.
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Zomato acknowledged a slowdown in demand starting November, adding to investor worries about its growth trajectory. Despite recent struggles, 23 out of 27 analysts covering the stock still recommend a ‘buy,’ with a consensus average target price of Rs 305, according to Trendlyne data.With shares down more than 25% over the past month, analysts emphasized the need for Zomato to tackle competitive pressures and improve profitability to regain investor confidence.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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