Macquarie has reiterated its “Underperform” rating on Zomato, slashing its target price to ₹130, signaling a significant downside from the current market price of ₹230.70.
Key Concerns:
- Competitive Pressures:
- Intensified competition in the food delivery and quick commerce segments continues to weigh on profitability.
- Blinkit Margins Under Pressure:
- Extended periods of negative margins for Blinkit are expected, further impacting the company’s financial health.
- Limited Margin of Safety:
- Analysts flagged concerns over limited margin safety given the current operating environment.
- Growth Outlook:
- Food delivery business could face a mild downside with 20% GOV CAGR projected for FY26-28.
Analyst Perspective:
Macquarie remains cautious about Zomato’s profitability trajectory amidst a highly competitive landscape, while warning of a prolonged recovery timeline for its quick commerce arm.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers are advised to consult their financial advisors before making investment decisions.
