Zomato share price targets have been revised upward following the Q1 results. Here’s why

Zomato share price- The massive online meal delivery company Zomato Ltd.’s June quarter results exceeded expectations in a number of areas. The Zomato management set a goal to raise Blinkit’s dark store count from 639 at the end of the June quarter to 2,000 by the end of CY26. They also guided for a growth rate of at least 20% in the short term in the Food Delivery (FD) business. Following Q1 earnings, market analysts are generally optimistic about the company and predict up to 50% possible upside on the counter.

Nomura India predicted that Zomato would soon strike a balance between its growth and margin goals. Zomato’s medium-term goal of a 4-5 percent adjusted EBITDA margin in the FD segment is not seen as being at risk, according to the international brokerage. With a contribution margin of 7.5%, up 60 basis points from FY24, Nomura India is predicting a 20–23% YoY growth in FD gross order value (GOV) in FY25–26.

We observe that Zomato still has a long way to go in both the FD and Q-commerce industries despite its rapid expansion and increasing profitability. We increase our target price to Rs 280 in order to account for Blinkit’s anticipated longer-term growth. During FY25–26F, we raise Ebitda by 26–60%. Slowing growth in FD and Q-commerce sectors, as well as the capital allocation of $1.5 billion in cash, are major risks, the report stated.

Blinkit is known for defying attempts to appropriately assess the company because of its robust development and the disruptive and dynamic character of rapid commerce, according to MOFSL. With a year-over-year increase of more than 100% in gross order value (GOV), the brokerage feels that Blinkit’s GOV is the primary driver of variance for a DCF-based price objective.

Zomato should disclose a profit margin of 4.7 percent in FY26 and 4% in FY25, according to MOFSL. Zomato’s food delivery business is steady, and Blinkit presents a chance for a generation to take part in the upheaval of sectors including e-commerce, supermarket, and retail, the statement said.

Our Rs 300 DCF-based valuation indicates a 25% increase over the present price. We continue to recommend buying the stock, according to MOFSL.

Zomato is still delivering on its promise of rapid growth and increased profitability, according to Nuvama. The management, it stated, is not lowering its growth aspirations; by 2026, it plans to add 2,000 dark stores. Currently, this brokerage values Blinkit at $13 billion and food delivery at $14 billion.

“We recommend maintaining a ‘BUY’ stance with an updated target price of Rs 285, up from the previous Rs 245, reflecting a valuation extension to September 2026.”

According to reports, CLSA boosted its target price to Rs 350 per share and kept a “Buy” rating on Zomato, among other brokerages. While Goldman Sachs and Citi view the stock at Rs 280 a share, UBS offered a target price of Rs 260 per share. The target price per share for Axis Securities is Rs 287, Morgan Stanley is at Rs 278; Bernstein is at Rs 275; and Jefferies is at Rs 275.

In addition, CLSA increased its earnings projections for Zomato from 6% to 36% for the fiscal year 2025–2027, noting that Blinkit’s performance improved despite a notable acceleration in dark storefronts. In addition to CLSA, Motilal Oswal is the other brokerage that currently has a ₹300 price objective for Zomato.

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