Bernstein bullish on Zomato despite rising quick-commerce competition, says shares can rally to Rs 310

Zomato is likely to strengthen its leadership in quick commerce: Bernstein.

Global broking firm Bernstein reaffirmed its bullishness on food delivery giant Zomato Ltd., as competition in the quick commerce space heats up.

Bernstein maintained its 'outperform' rating on Zomato, with a target price of around Rs 310 per share. This indicates a whopping upside of around 39 percent.

Bernstein noted that competition in quick commerce remains a key debate, driven by aggressive expansion and rising marketing spends across Zomato, Swiggy, and Zepto. However, unlike the pre-IPO phase, the brokerage believes the focus is now more balanced - pursuing growth while ensuring medium-term profitability.

Even if competition intensifies in the coming quarters, it sees a rational limit to price wars due to Swiggy’s lower margin structure. Bernstein expects Zomato to strengthen its leadership in quick commerce.

At 9.16 am, Zomato shares were quoting Rs 226.15 per share, higher by a percent on the NSE.

Follow our market blog to catch all the live updates

In a report disseminated in January, Bernstein advised investors to “stick to the winners” in 2025, with stock picks driven by an IT earnings upgrade cycle, strong US macroeconomic trends, and a recovery in discretionary and generative AI spending.

In the internet sector, Bernstein foresees quick commerce outpacing other retail channels, driven by growth in new categories and expansion into Tier 2 cities. Zomato is seen as the biggest beneficiary in this space, it said.

Earlier, the brokerage had noted that early assumptions believed that quick commerce would only cater to small, high-end purchases in major cities have proven too narrow. Instead, QC is proving popular across various consumer segments and locations, beyond just metro areas and rich customers.

Zomato shares have also been in focus as the NSE will include the stock in the benchmark Nifty 50 index following its March rebalancing, along with non-banking financial company Jio Financial Services.

On February 6,  Zomato changed its name to Eternal and the company’s board has approved the same, the company said in a stock exchange filing. The rebranding is a result of the company’s aim to broaden its business scope beyond the flagship food delivery service.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.