Zomato has secured a spot among Jefferies‘ “top picks” for the next five years, with the brokerage predicting a 2.5X increase in the foodtech startup’s share price by March 2029.
Jefferies anticipates Zomato’s stock to climb to INR 400 from its current value of approximately INR 160.
The listed Indian startup has been mentioned in the list alongside the likes of Ambuja Cement, Axis Bank, Bharti Airtel, JSW Energy, L&T, Max Healthcare, SBI, TVS Motors, Amber, and Macrotech.
“Low penetration levels in core segments offer a long runway to growth with both food delivery (19% GOV CAGR over FY24-30) and quick commerce (40% CAGR) expected to jump,” said Jefferies analysts on Zomato’s growth potential.
They anticipate a 20-fold increase in profit during the FY24-FY30 period and foresee the stock yielding over 150% returns within this timeframe.
Meanwhile, according to a research note from UBS, Zomato’s year-on-year growth is expected to remain robust, in line with the company’s guidance of over 20%.
The brokerage has upheld its ‘buy’ rating and set a price target (PT) of INR 195 on Zomato, indicating an upside of nearly 22% from the stock’s last Friday close. However, UBS reportedly expects some downside to the consensus gross merchandise value (GMV) estimates.
Continue Exploring: Zomato’s strong Q3 performance spurs brokerage firms to boost price targets; Blinkit expansion drives optimism
Zomato’s shares surged approximately 3% to INR 164.45 on the BSE during early trading on Monday (March 18). However, they later pared most of their gains and were trading 0.7% lower at INR 158.75 by 3:10 PM IST.
It’s worth mentioning that Zomato stated in a filing on Saturday that it received a penalty notice for Goods and Services Tax (GST) from Gujarat’s Deputy Commissioner of State Tax, relating to FY19.
The company has been instructed to pay a total amount of INR 8.58 Cr, including interest and penalty charges.
Continue Exploring: Zomato faces INR 8.6 Cr GST penalty notice from Gujarat State Tax Authority
In a research note last week, HSBC raised its price target (PT) on Zomato to INR 200 from INR 163. This adjustment currently suggests a potential upside of over 25%, driven by the heightened expectations for Blinkit‘s order growth rate.
Propelled by the company’s three consecutive profitable quarters, Zomato’s shares have surged over 29% year to date.
Continue Exploring: Zomato reports third consecutive profitable quarter with INR 138 Cr PAT in Q3 FY24