CLSA has added Zomato to its high-conviction outperformance list, raising its target price to ₹400 from ₹370. The brokerage highlights Zomato’s strong positioning in the expanding total addressable market, which is outpacing rising competition. CLSA believes price competition remains rational and sees the recent correction in Zomato’s stock as a buying opportunity.
Zomato’s Quick Commerce (QC) segment is expected to experience rapid growth, with the entire QC profit pool expanding significantly over the next three years. CLSA projects a revenue CAGR of 51% and an EBITDA CAGR of 502% for FY24-27. Reflecting these positive trends and the company’s recent fundraise, CLSA has raised Zomato’s profit estimates by 2%-12%.
The brokerage views Zomato as well-positioned to capitalize on market growth, with strong execution and profitability improvements expected in the medium term.
