Shares of Zomato, the food delivery aggregator, surged 6.22% in early morning trade today, hitting a new all-time high of ₹280.90 per share. This boost follows Blinkit’s record-breaking order numbers and a target price upgrade from global brokerage firm UBS.
On Sunday, Blinkit co-founder and CEO Albinder Dhindsa celebrated a new sales milestone on social media, achieved ahead of the Raksha Bandhan festival.
Dhindsa wrote on X, “We’ll cross all-time high orders in a day on Blinkit in a couple of minutes. We also hit the highest ever OPM (orders per minute), GMV, chocolate sales, and most other metrics today! And at its peak, we hit 693 RPM (Rakhis per minute). Thank you to all our customers (especially the ones who placed their first blinkit order today) for trusting our service. Happy Raksha Bandhan to all."
Global brokerage firm UBS has raised its target price on the stock to ₹320 apiece from an earlier price of ₹260 apiece. The brokerage said the company's June quarter results exceeded expectations, driven by stronger-than-anticipated GMV growth in quick commerce, which posted a solid 27% increase in food delivery.
Both quick commerce and food delivery growth outperformed estimates, with margin expansion in both segments also surpassing expectations. For FY26–28, the brokerage lifted GMV estimates by 20–30% for quick commerce and 2-3% for food delivery.
The company is currently trading at 35x FY27 EV/EBITDA, compared to the 30x average for its Indian consumer/retail peers, reflecting its superior growth and margin expansion profile, it added.
Earlier, Morgan Stanley, another global brokerage firm, reaffirmed its "overweight" rating on Zomato, setting a target price of ₹278 per share. Similarly, Nomura recently raised its target price for Zomato to ₹280 from ₹225, maintaining a ‘buy’ recommendation.
Japanese brokerage firm Nomura emphasised Zomato's strong growth potential and improving profitability in both its food delivery and quick commerce segments. It expects the quick commerce business to grow by 100–100% annually in FY25–FY26, with Zomato nearing adjusted EBITDA breakeven at -0.1% and projecting a +1.1% margin for FY25.
Domestic brokerage firm Motilal Oswal also has a 'buy' rating on the stock, with a target price of ₹300 per share. It highlighted Blinkit as offering a "generational opportunity to participate in the disruption" of the retail, grocery, and e-commerce industries.
For the quarter ending in June (Q1FY25), Zomato reported a larger-than-expected increase in profit, driven by strong demand in its quick commerce division, Blinkit, and steady growth in its core food delivery business.
New-age tech stocks are making substantial gains on Dalal Street, led by Zomato, which continues to set new record highs. The stock has been consistently ascending since April 2023, closing positively in 16 out of the following 17 months. The largest monthly gain was recorded in April 2023 at 27%, followed by February with an 18.56% increase.
Today's rally has also propelled the company's market value to near ₹2.50 lakh crore. During this bullish streak spanning 15 months, the stock has delivered an impressive return of 431% to its shareholders.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
