Analysts predict that Zomato's stock price will rise by 33% from here. Examine the main causes.

Zomato share target price: Analysts have raised their target prices for Zomato shares due to the company's persistent "overdelivery" on the front of profits growth, which was once again emphasized in the June quarter (Q1) results. They now see a 49.5% gain in Zomato stock over the course of the following year.

They think Zomato is on a fast development trajectory and that there is a lot of possibility for growth in its profitability.Due of its limited penetration, Zomato has grown astronomically during the previous several years. We anticipate that Zomato will continue to develop rapidly over the next years, propelled by a rise in order volume and a larger client base. Zomato's trajectory towards profitability may be more rapid than expected due to increasing contribution margins, as the management is not reducing  about development aspirations," Nikhil Choudhary and Parth Ghiya of Nuvama Institutional Equities stated. The pair has rated the stock as a "Buy," with a revised target price of Rs 285 (up from Rs 245).
In intraday trading, Zomato jumped 19% on the bourses to a new high of Rs 278.45 a share. At Rs 262.45 a share, the stock closed 12.11 percent higher. On Friday, about 418.73 million shares were traded on the NSE and BSE counters. The benchmark BSE Sensex, in contrast, finished at 80,982 level, 886 points (1.08%) down.
Zomato announced a net profit of Rs 253 crore for Q1FY25 on Thursday, August 1, a significant increase from the Rs 2 crore net profit reported in the same period the previous year. Earnings  for the restaurant aggregator increased to Rs 4,206 crore, or around 74% year over year (Y-o-Y).  Along with focusing on the larger going-out market, which encompasses movies, sports, tickets, live events, and staycations, it also unveiled the 'District' app.

Along with focusing on the larger going-out market, which encompasses movies, sports, tickets, live events, and staycations, it also unveiled the 'District' app.

Among them, the gross order value (GOV) of the food delivery category increased by 10% QoQ and 27% Y-o-Y to around Rs 9,260 crore. At 20.3 million, its average monthly transacting users (MTU) increased 6.8% on a Q-o-Q basis.

Meanwhile, Blinkit's quick commerce segment's GOV increased 22.2% on a quarter-over-quarter basis to Rs 4,920 crore, and its adjusted EBITda continued to be breakeven.

Furthermore, the contribution margin for Blinkit increased somewhat to 4% QoQ, while it decreased by 20bps QoQ to 7.3 per cent for FD.
Zomato's meal delivery business, according to analysts, is solid, with the GOV CAGR of  Due in large part to rising ordering frequency from its more experienced cohort and a consistent conversion of its monthly "active" users to monthly transactional users, the 25% Y-o-Y growth is probably going to continue for the next two to three years.

However, they noted that in a price-sensitive market like India, platform fees may eventually reach a maximum, which would squeeze out the segment's profit levers.
The Dark Horse, Blinkit
The management's main goal is to increase Blinkit's shop density in both new and existing locations, given the low penetration levels. In contrast to 524 in FY24 and 1,000 for FY25, it stated intentions to increase the number of stores by almost 4x, to 2,000 by the fiscal year 2025–2026 (FY26).
Given this, Krish Beriwal and Abhishek Bhandari   Zomato's rapid commerce vertical is expected to rise 100–110 percent year over year in GOV in FY25–26, driven mostly by significant store expansions, according to Nomura. With a higher target price of Rs 280 (up from Rs 225), they have a 'Buy' rating.