Upcoming nifty 50 stock to buy now for an upside potential of more than 35%; Do you own it?

According to the sources, India’s e-commerce sector is booming, with a market size of $147.3 billion in 2024. It is projected to grow at a CAGR of 18.7% to reach $292.3 billion by 2028, driven by rising internet penetration and digital payments, with e-commerce payments surging by 23.8% in 2024.

Price movement

With a market capitalization of Rs 2.18 lakh crore, the shares of Zomato Ltd were trading at Rs 226.40 per share, increasing around 0.33 percent as compared to the previous closing price of Rs 222.60 apiece.

Brokerage recommendation

Bernstein, one of the well-known brokerages globally, gave a ‘Buy’ call on the E-Commerce stock with a target price of Rs 310 apiece, indicating a potential upside of 37.77 percent from Tuesday’s price of Rs 222 per share.

Rational

Bernstein notes rising competition in quick commerce with Zomato, Swiggy, and Zepto expanding aggressively. However, the focus has shifted from pure growth to balancing profitability. While price wars may intensify, Swiggy’s lower margins limit irrational pricing. Bernstein expects Zomato to strengthen its leadership in the sector.

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Financial performance

The company’s revenue soared 68%, rising from ₹3,288 crore in Q3FY24 to ₹5,405 crore in Q3FY25. However, net profit dropped 57%, falling from ₹138 crore to ₹59 crore. Despite strong revenue growth, profitability declined significantly over the period.

Revenue Split

In Q3FY25, Zomato’s total segment revenue reached ₹5,405 crore in Q3FY25, a 68% increase from ₹3,288 crore in Q3FY24. The majority of revenue, 38%, came from the food ordering and delivery segment, followed by Hyperpure supplies at 31%, Quick commerce at 25%, Going Out at 4.7%, and other sources contributing the remaining 0.07%.

Quick Commerce Insights

In Q3FY25, take rate fluctuations stemmed from higher sales of low-margin categories like electronics, with no major downward trend. Mature stores show strong margins, supporting expansion despite initial losses from newer stores. Store additions are driven by improved capacity, with 80% of business in top cities but growing traction in smaller markets.

Future Outlook

The company prioritizes GOV market share over order market share, citing potential manipulation. Despite competition, it remains stable, relying on infrastructure and service quality. Management is optimistic about profitability growth as store maturity and efficiencies improve, aiming to sustain market leadership while optimizing margins without sacrificing service quality.

Company Profile

Zomato Limited serves as an Internet site that connects users, restaurant partners, and delivery partners. The Company also provides a platform for restaurant partners to market themselves to their target audiences in India and overseas, as well as supply ingredients to restaurant partners.

Written by Abhishek Singh

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