Can Zomato shares hit Rs 310? Bernstein sees 35% upside despite quick commerce losses

Zomato shares could rally by as much as 35% to Rs 310, according to brokerage firm Bernstein, which maintained its “outperform” rating on the stock. The firm cites Zomato’s dominant position in India’s rapidly growing quick commerce space, where intensified competition from rivals like Swiggy and Zepto is being fueled by aggressive expansion and rising marketing spends.

Unlike the pre-IPO phase, Bernstein believes the focus has now shifted to balancing growth with medium-term profitability.

Zomato’s aggressive market expansion through its Blinkit platform and plans to double its dark stores by December 2025 are expected to solidify its leadership, Bernstein said. Despite rising competition delaying Blinkit’s breakeven target by 12 to 18 months, the brokerage expects Zomato’s early mover advantage and strong execution to sustain its competitive edge.

The company’s quick commerce segment is also set for geographic expansion, with Instamart planning operations in over 80 cities. While these initiatives will extend losses in the short term, Bernstein views them as critical for capturing a larger profit pool and unlocking long-term value, projecting year-on-year growth exceeding 70%.

“Investors should adjust to the new normal of quick commerce losses,” Bernstein noted, adding that the upside lies in Zomato’s strengthened growth profile.

Zomato shares have also been in the spotlight ahead of their inclusion in the benchmark Nifty 50 index as part of the NSE’s semi-annual reshuffle, effective March 28, 2025. The stock will join the index alongside non-banking financial firm Jio Financial Services.Additionally, the company announced earlier this month that it will rebrand as Eternal Ltd, reflecting its broader business vision, now spanning beyond food delivery to include ventures like Blinkit, District, and Hyperpure.Zomato shares gained as much as 3.4% on Tuesday, reaching Rs 230.15 on the BSE. The stock has surged 37.61% over the past year, but is down 14.05% over the last six months. Over the past month, shares have climbed 4.71%. The stock’s 52-week high is Rs 304.50, reached on December 5, 2024.

The company reported a 57% decline in net profit for the third quarter, falling to Rs 59 crore from Rs 138 crore a year earlier.

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