Zomato share price slides on Jefferies' 'hold' rating

Footech major Zomato's share price slipped 5% today to Rs 253 after the foreign brokerage Jefferies downgraded Zomato from “buy” to “hold” rating, citing competition in the quick commerce space.

Jefferies has also cut the price for Zomato to Rs 275 from Rs 335, implying an upside potential of 1%. The foreign brokerage also mentioned that this will be the year of consolidation for Zomato.

The firm has reduced its EBITDA projections for Zomato by 12% for FY26 and 15% for FY27 while lowering its net profit estimates by 17% for FY26 and 18% for FY27. The EPS (earing per share) for Zomato has also been reduced by 20% and 21% for FY26 and FY27 respectively.

Jefferies has lowered Blinkit's EBITDA forecast for FY26-27 and anticipates potential profitability challenges while it has halved the target multiple for Zomato's quick commerce business to 6X.

However, international brokerage Morgan Stanley has maintained its 'Overweight' rating on Zomato, with a target price of Rs 355. Meanwhile, Bernstein has listed Zomato as one of its top stock picks in its Indian Strategy, according to reports.

During the second quarter of the ongoing fiscal year, Zomato achieved a remarkable 68.5% quarter-on-quarter growth in operating revenue, reaching Rs 4,799 crore from Rs 2,848 crore in Q2 FY24. The Gurugram-based company also recorded a 4.8X increase in net profit to Rs 176 crore in the quarter ending September.

Zomato's 52-week high price reached Rs 304.7 on 9 December 2024, while the 52-week low price was Rs 121.6 on 18 January 2024. Currently, the Gurugram-based firm is trading at Rs 253.3 (as of 11:40 AM today), with a total market capitalization of Rs 2,44,395 crore or $29 billion.