Tue Jan 07 11:40:00 IST 2025: ## Zomato Stock Plunges After Jefferies Downgrade, Despite Morgan Stanley’s Optimism
**Mumbai, January 7** – Zomato’s shares experienced a sharp 5% decline in early trading today following a downgrade from global brokerage firm Jefferies. Jefferies revised its rating to “hold” from a previous “buy,” citing concerns about increased competition in the quick commerce sector and the stock’s significant rise in 2024. The brokerage slashed its price target for Zomato by 18 percent to Rs 275, predicting a period of price consolidation in 2025. Jefferies also significantly lowered its EBITDA and EPS projections for Zomato, particularly for its quick commerce arm, Blinkit, due to anticipated intensified competition from players like Swiggy Instamart, Zepto, and Amazon.
In contrast, Morgan Stanley maintained its “overweight” rating on Zomato and a price target of Rs 335, highlighting the company’s focus on profitability and strong user growth as key drivers of future revenue. Morgan Stanley expects a 33% revenue CAGR over FY25-27 for Zomato despite competitive pressures.
The contrasting views highlight the uncertainty surrounding Zomato’s future prospects. While Jefferies emphasizes the risks posed by the increasingly competitive quick commerce market, Morgan Stanley remains confident in Zomato’s long-term growth potential. Investors are advised to consult with financial advisors before making any investment decisions. The volatility in Zomato’s stock price underscores the need for caution in the rapidly evolving Indian market. For ongoing market updates, visit [link to Moneycontrol market blog].
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