Zomato is expanding aggressively through its rapid commerce business, Blinkit. Blinkit is rapidly growing its global reach, with an expected 44 cities by mid-2024, up from just 25 in March. The expansion includes significant Tier 2 towns such as Haridwar, Jodhpur, Mohali, and Rohtak, which are all close to current centers like Delhi NCR and Jaipur. This strong geographic drive is part of a bigger goal to attract new users and optimize the warehouse network.
In comparison, competitors Zepto and BBNow operate in 13 and 23 cities, respectively, making Blinkit's footprint substantially greater. This growth into new markets raises the competitive intensity in the q-commerce space, potentially leading to pricing conflicts in certain cities as rivals compete for market share.
Related News |
Swiggy IPO: Can It Challenge Zomato’s Dominance? Look At Both Food-Tech Giant's Financial Results
While these innovations may increase operational complexity, they are projected to help Blinkit increase its share of client spending. However, these measures are still in the pilot phase, and it is uncertain whether they will be implemented across the board.
Zomato Share Price Target
With a current market price of Rs 291, experts have increased Zomato's fair value (FV) to Rs 315, citing the company's potential development trajectory and strategic plans. Given Blinkit's quick growth and innovative initiatives, analysts have raised the Gross Merchandise Value (GMV) Compound Annual Growth Rate (CAGR) prediction to 81% for FY2024-27, up from 70%. According to the Kotak Securities report, the higher sales and strategic developments resulted in a revised Fair Value of Rs 315 per share.
While the competitive landscape remains challenging, Blinkit's rapid expansion and Zomato's long-term objectives position the company for continued success. Analysts offer a "Buy" rating, with the stock expected to return more than 15% in the next 12 months.
On Friday, the shares of Zomato closed at Rs 278.25. The 52 week high and low of the share is Rs 298.20 and Rs 99.30 respectively. According to the BSE analytics, the shares have given massive returns of 178.03 per cent in the last 1 year.
Related News |
Reliance And Disney Merger: Centre Approves Transfer Of Viacom18's Non-News Channels to Star India
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. Times Now Digital suggests its readers/audience to consult their financial advisors before making any money related decisions.)