Zomato‘s share price has seen an incredible bull run in the past year, going up around 200%. Analysts at Kotak think that food delivery still has some steam left.

The Zomato Analyst: Analysts at Kotak Securities maintained the “buy” rating for the stock with a price target of ₹190. The target implies an around 25% upside from the stock’s last closing price of ₹152.75.

The Zomato Thesis: The analysts said that Blinkit appears to be expanding its platform by adding new categories, aiming to achieve higher Average Order Value (AOV), improve unit economics, and enhance customer loyalty.

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Blinkit has observed an increase in AOV to ₹600+ in the last two quarters. The company is experimenting with adding a greater number of categories as well as Stock Keeping Units (SKUs). However, expanding into new categories may increase the complexity of operations, the analysts said.

The brokerage also said that the quick-commerce giant looks unlikely to face any significant impact from new competitors in the near term. Quick commerce is expected to grow faster than other e-retailers in the next five years, the analysts added.

Kotak analysts anticipate Zomato’s earnings per share (EPS) of ₹2.0 in FY25E and ₹3.8 in FY26E. Currently, the stock is trading at a valuation of 39.8x Price/Earnings (P/E) ratio based on FY26E EPS. As per the analyst Zomato’s revenue could grow at a CAGR of 46% over FY23-FY26.

Price Action: Zomato’s share price was up 0.29% to trade at ₹153.20 on Friday afternoon.

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