Zomato shares fall 5% as analysts raise concerns over intense competition; Swiggy also slips nearly 2%

After Zomato’s shares more than doubled in value in 2024, analysts at Jefferies predict that 2025 could be a breather year, with the stock likely shifting gears into a phase of price consolidation.

The brokerage, as per news reports, said that aggressive strategies by existing players and the entry of new competitors could lead to higher discounting, posing risks to Zomato's medium-term profitability.

Jefferies has sharply reduced Blinkit's EBITDA forecast for FY26-27 and halved its target multiple for Blinkit to 6x, the report added.

"For Zomato overall, the brokerage cut its EBITDA estimates by 12 percent for FY26 and 15 percent for FY25, alongside profitability estimates reduced by 17 percent for FY26 and 18 percent for FY27. Earnings Per Share (EPS) projections were also slashed by 20 percent for FY26 and 21 percent for FY27," Moneycontrol reported.

In the past 12 months, shares of Zomato have jumped 91%.

Zomato's rival Swiggy, too, was trading in the red.

Swiggy's shares were trading at ₹522.70, down 1.77%.

The quick commerce sector, as per reports, is poised for massive growth, with India’s market expected to reach US$5 billion by 2025 and US$9.94 billion by 2029 per some estimates.

Key growth drivers include changing consumer preferences, increased e-commerce adoption, and demand for convenience among millennials and Gen Z.

India’s quick commerce market is witnessing intense competition among a few key players: Zepto, Zomato’s Blinkit, and Swiggy’s Instamart.