Jefferies has maintained a ‘Hold’ rating on Zomato (Eternal) while cutting its target price to ₹250 from ₹255, flagging increasing caution around the company’s quick commerce (Q/C) segment and competitive landscape in food delivery. The brokerage stated that while Q4FY25 results looked solid on paper, the management commentary was more conservative, particularly on near-term growth expectations.
Zomato reported a net profit of ₹39 crore, down 77.7% YoY from ₹175 crore, despite a 63.8% surge in revenue to ₹5,833 crore. EBITDA also declined 16.3% YoY to ₹72 crore, while margins halved to 1.2% from 2.4% in the year-ago quarter. Jefferies highlighted that although revenue momentum remains strong, the adjusted EBITDA estimates have been cut by 5–15% to reflect cost headwinds and elevated competition.
Management expects competition in quick commerce to intensify, with Amazon and Flipkart likely to ramp up operations. In the core food delivery business, they flagged a mismatch in rider supply and demand, though it is expected to stabilise in due course.
Given these uncertainties and lack of near-term re-rating triggers, Jefferies prefers to stay on the sidelines, even as it acknowledges the company’s strong execution and scale.
Disclaimer: The above views are those of the brokerage and not the publication. Investors are advised to consult a certified financial advisor before making investment decisions.
