HSBC raises target price on Zomato, sees 29% upside

Zomato shares have gained almost 200 percent in the last one year.

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26 Aug, 2025 12:21

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International brokerage and lender HSBC retained its “buy” call on restaurant aggregator and food delivery firm Zomato as digital spends in India are likely to increase.

HSBC raised its target price on Zomato from Rs 163 to Rs 200, an upside of 29 percent from the closing price on March 11.

It is likely that advertising revenues will remain the cornerstone of the Blinkit, Zomato’s grocery unit, in the long term. Blinkit ad revenues will be around 3 percent of the total digital ad-spend of India within the next five year, HSBC said.

On March 6, foreign investor Antfin Singapore Holding PTE sold 17.64 crore shares, or a 2.02 percent stake, in Zomato at an average price of Rs 160.26. The transaction was valued at Rs 2,827.08 crore. It held 6.32 percent stake in the food delivery company till December 2023.

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Motilal Oswal expects Zomato to deliver strong growth of 70 percent YoY in FY24 and 41 percent in FY25, with Blinkit outpacing the food-delivery business because of geographical expansion, improvement in order frequency, and moderation in a competitive environment in the quick commerce industry.

"The food delivery business is still in a nascent stage in India, with a long runway for growth. With a dominant market share and strong growth in the food delivery business and Hyperpure, we expect Zomato to report a strong 38 percent adjusted revenue CAGR over FY24-26," said Motilal Oswal.

Zomato supplies essentials and groceries to restaurants through its business-to-business vertical Hyperpure.

Over the past six months, Zomato shares have jumped more than 55 percent. In comparison, the frontline index Nifty has gained around 12 percent. The stock is up almost 200 percent in the past year.

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