Zomato continues to strengthen its leadership in India's quick commerce sector, with Bernstein maintaining an "Outperform" rating on the stock. The brokerage firm has set a target price of ₹310, reflecting a 35% upside potential. here's Is what Bernstein says on Zomato 

Zomato's Market Expansion and Quick Commerce Leadership

Over the past year, Zomato has been aggressively expanding, particularly in the quick commerce segment through Blinkit. The company is expected to maintain its leadership position in this space. As competition intensifies, Zomato’s ability to leverage its existing infrastructure and execute efficiently will be crucial in maintaining its dominance.

Blinkit, Zomato’s quick commerce arm, has been a major focus of expansion. The company has been scaling up its dark store network and aims to double its number of stores by December 2025. Meanwhile, Instamart, its competitor, plans to expand to over 80 cities, adding further pressure on Blinkit’s growth trajectory.

Rising Competition Delays Blinkit’s Breakeven Timeline

One of the biggest challenges facing Blinkit is the rising competition in the quick commerce sector. The intense rivalry has pushed back its breakeven timeline by 12-18 months. Despite this delay, Bernstein expects Blinkit to retain its leadership due to its early-mover advantage and strong execution strategy.

Zomato Investors Need to Adjust to Quick Commerce Losses

Bernstein’s report highlights that Zomato investors should brace for a “new normal” of losses in the quick commerce segment. The sector requires high capital investments, and while it offers long-term growth potential, profitability may take longer to materialize.

Strong Growth Outlook Despite Challenges

Despite near-term challenges, Zomato's long-term growth outlook remains promising. The company is projected to achieve a 70%+ year-on-year (YoY) growth rate, making it a compelling investment for those looking to capitalize on India's evolving quick commerce landscape.

Zomato Joins Nifty50: A Major Milestone

Zomato was recently added to the Nifty50 index, making it one of the elite companies in India's stock market. This inclusion signifies:

Stronger Market Position: Nifty50 consists of India's top 50 companies, and Zomato's inclusion reflects its growing influence in the stock market.

Higher Institutional Investments: Many mutual funds and institutional investors track the Nifty50, which means more capital inflow into Zomato’s stock.

Boosted Credibility: Being part of Nifty50 enhances Zomato’s credibility among investors, increasing long-term growth potential.

This milestone further reinforces Bernstein’s bullish outlook on Zomato, making it a key stock to watch.

Shares OF Zomato trading 2.94% higher on 25th Feb at 11:17 Am 

Disclaimer

This article is for informational purposes only and should not be considered financial or investment advice. The stock market involves risks, and investors should conduct their own research or consult with a professional advisor before making any investment decisions. The views expressed in this article are based on publicly available information and do not constitute an endorsement of any stock or company.