The food delivery and quick commerce industry is poised for significant growth, with the online food delivery market projected to reach $579.15 billion by 2034, growing at a CAGR of 13.20 percent from 2025 to 2034. Factors driving this expansion include increasing smartphone adoption, urbanization, and changing consumer lifestyles while favouring convenience.
In regions like Asia Pacific, the market is expected to grow even faster which is fueled by a young population seeking quick meal solutions. The rise of cloud kitchens and hyperlocal delivery services further focuses on operational efficiency and consumer accessibility.
With a market capitalization of Rs 2,44,539.89 crore, on Tuesday, the shares of Zomato Ltd touched a day’s low of Rs. 251.60 which is 5.18 percent lower than the previous closing price of Rs. 264.65 apiece. The stock reiterated to Rs. 252.15 from the day’s low. This stock has delivered around 90 percent return in the past year and thus outperformed the nifty index in the same period.
Brokerage Recommendation:-
Jefferies, a globally reputed brokerage firm, downgraded from a ‘Buy’ call to a ‘Hold’ rating on the stock with a target price of Rs 275 apiece, indicating a potential upside of 3.91 percent from Monday’s closing price of Rs 264.65 per share.
Brokerage rational:-
As per the brokerage, the increase in rising competition in the Quick Commerce space is a worrying factor that can impact the company’s profitability. The competition apart from Swiggy’s Instamart, Zepto, Amazon and other players plan to enter this space. The stock can consolidate in 2025 year and the stock more than doubled in 2024 according to Jefferies.
New Players into the market with aggressive spending can most likely result in higher discounting which may pose a threat to its profitability. Jefferies has cut down Blinkit’s EBITDA forecast over FY26 and FY27 and halved its multiple to 6x. The broker estimates 12 percent for FY26 for EBITDA and 17 percent for FY26. They have deducted the estimates by 20 percent for FY26 for EPS.
Financial performance:-
The company’s revenue surged 68.50 percent, increasing from Rs 2,848 crore in Q2FY24 to Rs 4,799 crore in Q2FY25. However, net profit increased by 389 percent from Rs 36 crore to Rs 176 crore in the same period.
In terms of return ratios, the return on equity for FY24 stood at 0.97 percent, and the return on capital employed stood at 0.99 percent. The debt-to-equity ratio stood at 0.03 times as of FY24.
Revenue segmentation:-
In Q2FY25, Zomato’s revenue consists of Food Delivery which contributes around 41.92 percent, Hyperpure supplies (B2B) contributes around 30.69 percent, Quick Commerce contributes around 24.08 percent, Going out contributes 3.20 percent, and the remaining 0.11 percent from Others.
Company profile:-
Zomato, founded in 2008, is a prominent online food delivery and restaurant discovery platform. It operates in multiple countries, offering users access to a vast database of restaurants, reviews, and menus. The company’s business model primarily relies on a commission-based structure where restaurants pay for orders facilitated through Zomato. Additionally, it generates revenue from advertising services and subscription programs like Zomato Pro, which offers exclusive discounts. Zomato has diversified its offerings to include grocery delivery and cloud kitchens, enhancing its position in the competitive food-tech industry.
Written by Santhosh S
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