Global brokerage CLSA sees enhanced potential in the quick-commerce sector and picked Zomato as its top retail bet.

What Happened: Quick commerce is significantly reshaping India’s retail supply chain by simplifying and flattening the distribution network, the brokerage said in its note. This emerging model is not only enhancing operational efficiency but is also providing new brands with increased visibility and a more competitive edge in the marketplace, it added.

CLSA said that Zomato will be the largest listed beneficiary in the sector with its Blinkit vertical. Blinkit is anticipated to achieve positive EBITDA and net profit by FY25, marking a significant turnaround for the company.

Looking ahead to FY26, Blinkit is expected to play a crucial role in Zomato’s financial performance, potentially contributing up to 37% of the company’s earnings per share.

CLSA had an “overweight” call on Zomato, with a target price of ₹353, which represents a 41% upside from its current market value.

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The brokerage sees unlisted firm Zepto, which recently raised $340 million (₹2,851 crore) in its latest funding round led by General Catalyst, as an up-and-coming competitor in the industry with much to offer to customers. With the latest funding round, Zepto’s valuation has surged by nearly to $5 billion (₹41,934 crore) from $3.6 billion(₹30,192 crore) in June.

Earlier, Kotak also delivered an upbeat forecast for the food-delivery giant. It expects Zomato to remain better positioned with its quick-commerce vertical Blinkit amid heightening competition from new entrants, including Flipkart and potentially Amazon.

CLSA sees consumer staples marketers like Marico and Hindustan Unilever Limited (HUL) increasingly facing challenges as their traditional distribution advantage is starting to erode. The shifts in the market landscape, driven by evolving consumer behaviour and the rise of alternative distribution channels, are putting pressure on these companies, the brokerage asserted.

It had an “underperform” call on both Marico and HUL with target prices of ₹470 and ₹2,161 respectively.

Price Action: Zomato’s shares were up nearly 2% to ₹249.20 on Tuesday.

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