Zomato Shares Jump 1.74% After Morgan Stanley Projects Stock ‘Potential Doubler’

Shares of Zomato jumped 1.74% during early trading hours to INR 274.30 apiece on the BSE today (November 18) after global brokerage firm Morgan Stanley projected that the stock has the potential to double in value within five years—or even in less than three years under a bullish scenario.

The brokerage firm in a note also highlighted Zomato’s rising share of quick commerce in India’s retail market, strong execution in food delivery and quick commerce, a deep balance sheet, and a large profit pool by 2030, which led them to maintain an “overweight” rating and a “top pick” status.

The brokerage has reaffirmed its ‘overweight’ rating on Zomato’s stock and increased its price target to INR 355, up from INR 278. The revision reflects Zomato’s strong market leadership and optimistic growth potential in the quick commerce segment.

Zomato’s rise is driven by its growing share in India’s quick commerce market, which is expected to grow rapidly over the next decade. Goldman Sachs, in a research note on June 25, estimated that Zomato now holds a 56-57% market share in the food delivery market. 

As per the brokerage firm, while there are near-term challenges such as fierce competition and high spending on expansion, Zomato’s ‘deep balance sheet’ and ability to withstand competitive pressures are key strengths. Its food delivery business also remains robust, underpinned by a loyal customer base and solid operational metrics, said Morgan Stanley.

The brokerage firm believes that if Zomato can leverage its market leadership and meet projections, the stock’s growth could exceed expectations.

On a year-on-year (YoY) basis, Zomato’s operating revenue surged by 68.5%, rising from INR 2,848 Cr in the September quarter of the previous fiscal. Its PAT also saw a significant jump of 389%, increasing from INR 36 Cr.

Meanwhile, Zomato experienced strong growth across its verticals. The gross order value (GOV) for food delivery increased by 5%, reaching INR 9,690 Cr in Q2 FY25, up from INR 9,264 Cr in the previous June quarter.

Quick commerce business Blinkit’s GOV surged 25% QoQ to INR 6,132 Cr.

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