Zomato shares have had a challenging year, with the stock dropping 25.45% from its record high of Rs 304.50 on December 5, 2024. This fall has raised questions about the stock’s future, leading analysts to weigh in on whether investors should buy, sell, or hold.
Foreign brokerage Jefferies has downgraded Zomato’s rating to ‘Hold’ from ‘Buy,’ slashing its target price to Rs 275 from Rs 335. The downgrade is attributed to increasing competition in the quick commerce sector. Jefferies expects the stock to consolidate over the next year, advising caution for investors.
However, Bernstein remains optimistic, maintaining an ‘Outperform’ rating and a target price of Rs 335. They highlight Zomato’s leadership in food delivery and quick commerce, noting strong user acquisition and market expansion through initiatives like Dine Out. Bernstein believes that Zomato is well-positioned to capture growth in both food delivery and quick commerce.
Emkay Global also sees potential in Zomato, calling it one of the better ways to play the digital adoption theme. They expect strong growth in both sectors and believe the company’s valuation of 9 times EV/Revenue for FY26 is reasonable. Profitability is improving, thanks to operating leverage, which could lead to positive long-term prospects.
On the technical side, analysts are more bearish. Ameya Ranadive, a Senior Technical Analyst, suggests that Zomato’s stock is currently in a downtrend and could be a “sell-on-rise” candidate. He sets a stop-loss at Rs 245 and downside targets at Rs 205. A R Ramachandran, an independent analyst, echoes this sentiment, suggesting that investors should wait for the stock to close above Rs 240 for a potential buy.
While there’s some optimism, Zomato’s short-term outlook remains uncertain. Investors should carefully consider these insights before making a decision.
