New Delhi: Global brokerage firm Jefferies has downgraded Zomato’s shares to ‘hold’ as it revised the target lower, citing increasing competition as a threat to the online food aggregator’s profitability.

Although valuations appear reasonable considering Zomato’s strong execution and growth opportunities, Jefferies is “worried on the rise in quick commerce competition.”

Jefferies has set a target price of Rs 275 per share from Rs 335 apiece earlier, as analysts expect a year of consolidation for the stock after it doubled in value in 2024.

Additionally, Jefferies sharply cut its EBITDA forecast for Blinkit, Zomato’s quick-commerce arm, for fiscal years 2026-27. The brokerage also halved its target multiple for Blinkit to six times.

The market capitalisation of Zomato has grown to Rs 2.55 lakh crore in the last 12 months, as its stock rallied by almost 100 per cent.

Meanwhile, Anand Rathi Share and Stock Brokers Ltd. initiated coverage on Zomato and Swiggy with a ‘buy’ rating, as these firms diversify their portfolios beyond food delivery to capture a larger share of the growing intracity e-commerce market.

Amid the surge in quick commerce industry, the food collection take-away segment in India is projected to register a compound annual growth rate (CAGR) of over 7.7 per cent during 2023–28.

The rapid rise of quick commerce in India is reshaping the retail landscape, with urban populations progressively seeking fast delivery services for daily necessities, according to GlobalData, a leading data and analytics company.

According to Grant Thornton Bharat Dealtracker, quick commerce fund raising activity headlined in November, which otherwise witnessed a subdued activity as deals have been delayed/ postponed to 2025.

November 2024 saw 163 transactions totalling $10.8 billion. The quick commerce space remained a bright spot, with notable fundraises by Zepto, Swiggy and Zomato.