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Food delivery aggregate and quick commerce company Zomato's stock is seeing a decline of about 5% during early trading today. Global brokerage firm Jefferies has downgraded Zomato's rating from Buy to Hold. Along with this, the target price on the stock has also been reduced. Jefferies has reduced the target price on this stock from ₹ 335 to ₹ 275 per share.
After cutting the target by 18%, the brokerage firm said that increasing competition in the quick commerce space is a matter of concern in terms of profit. Apart from Blinkit, Swiggy's Instamart, Zepto, Amazaon and many other players are in the quick commerce space.
What did Jefferies say about the competition? Jefferies says that the year 2025 can be a year of consolidation for Zomato stock. This stock has seen a nearly double growth during 2024. However, in terms of strong execution and opportunity for the company, the valuation has not become very expensive yet. But, increasing competition in the quick commerce space will be challenging. The discount may increase due to the entry of new players in this space and the aggression of existing companies. The discount will affect profits in the medium term. The brokerage firm has cut Blinkit's EBITDA (working profit) estimates for the financial years 2026 and 2027.
| EBITDA/Profit/EPS | Business Year | Cut down on estimates |
| EBITDA | 2025 | 15% |
| EBITDA | 2026 | 12% |
| Profit | 2026 | 17% |
| Profit | 2027 | 18% |
| EPS | 2026 | 20% |
| EPS | 2027 | 21% |
Out of the 26 analysts who cover Zomato, 23 have given Buy recommendation on the stock. Apart from Jefferies, 2 other analysts have given Sell rating on the stock.
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