Zomato [NSE: ETERNAL] is betting big on Blinkit, and investors are starting to take notice. Analysts highlight Blinkit’s fast growth in the quick commerce space, better cost efficiency, rising market share, and smart integration with Zomato’s core business as the major reasons to watch the food delivery stock in India. As Blinkit continues to scale, it’s creating better Zomato future prospects, which is a big reason for investors to stay bullish.
Moreover, Zomato has shifted from Quick, its quick delivery initiative, to the Bistro model of Blinkit, keeping profits and reliability over speed. The Bistro model is the one that has in-house kitchens to serve food in 10-15 minutes. This shift is a strategic move taken by Zomato, knowing how important it is to deliver value rather than being quick.
Zomato-Blinkit Merger & Zomato Share Prices
In June 2022, Zomato acquired Blinkit (formerly Grofers) for ₹4,447 crore, initially meeting with investor skepticism due to Blinkit’s operational challenges and cash burn. Post-acquisition, Zomato rebranded itself as Eternal in February 2025, integrating Blinkit into its portfolio alongside food delivery, Hyperpure (kitchen supplies), and District (live events). In FY24, Blinkit revenue contribution surged to ₹2,302 crore, up from ₹1,064 crore in FY23, with a reduced adjusted EBITDA loss of ₹37 crore in Q4 FY24.
As of May 9, 2025, Zomato share price closed at ₹229.81, reflecting a slight increase from the previous day’s ₹229.45. The recent share price movement reflects a positive investor sentiment. The recent rise in the share price reflects growing investor confidence. Most analysts are recommending a “Buy” with a median price target of ₹300, indicating a potential upside of approximately 28% from the current level. This positive sentiment is majorly driven by Blinkit’s rapid growth in the quick commerce sector, improved unit economics, and expanding market share, positioning Zomato for long-term growth.
What Drives Investors Towards Zomato-Blinkit?
Zomato has been making a series of investments in Blinkit, seeing the growth of the quick commerce setups lately. The investments aim to add more Blinkit stores around the nation to serve more customers and make more profit. The seriousness that Zomato has been showing towards managing and expanding Blinkit is one of the main reasons why investors choose them for investments. However, many other factors support this decision:
- Business Segmentation: Zomato’s expansion into quick commerce through Blinkit and other services like Hyperpure and District reduces dependency on the food delivery segment, mitigating sector-specific risks. These diversified revenue streams are considered the biggest strength of the team.
- Market Valuation: Analysts at Goldman Sachs estimate Blinkit’s implied valuation at ₹119 per share, surpassing Zomato’s food delivery business valuation of ₹98 per share, indicating Blinkit growth impact on Zomato’s overall value.
- Operational Synergies: Shared delivery infrastructure between Blinkit and Zomato’s food delivery services optimises fleet utilisation, potentially reducing operational costs.
- Competitive Edge: The merger positions Zomato to compete effectively with rivals like Swiggy’s Instamart, Zepto, and other quick commerce players, leveraging its expanded service offerings and customer base.
- Future Growth Potential: Analysts project Blinkit to achieve EBITDA positivity by FY27, reflecting a positive long-term outlook despite current challenges.
Is it a Buy?
If you’re a growth-focused investor and can tolerate short-term volatility for potentially high upside in the next 2-4 years, Zomato stock recommendation presents a compelling opportunity.
Leadership in Quick Commerce
Blinkit now commands the top spot in India’s quick commerce segment (~46% market share), a space projected to grow into a $35 billion industry by 2030. This puts Zomato at a first-mover advantage.
Diversified Revenue Model
After the integration of Blinkit, Zomato is no longer just a food delivery company. It now operates in food delivery, quick commerce (Blinkit), kitchen supply (Hyperpure), and events (Zomato Live). This reduces dependence on any single vertical.
Improving Financials
Blinkit reported a year-on-year revenue of ₹1,709 crore in the fourth quarter of the financial year 2024-25, up by 122% compared to ₹769 crore in the previous financial year. However, there was an increase in adjusted EBITDA losses to ₹178 crore, up by ₹75 crore compared to the previous quarter of the same financial year. The reason cited for this loss was aggressive infrastructure expansion aimed at providing better services to customers.
Despite reporting a loss in EBITDA, the contribution margin of the net order value improved by 0.1% to 3.9% compared to the previous quarter. This improvement occurred due to increased consumer spending, especially in non-grocery categories.
Strong Unit Economics
Blinkit’s order density and frequency are improving, especially in top cities like Delhi NCR and Mumbai, driving down delivery costs and increasing contribution margins. Post-merger, Blinkit’s average customer order frequency rose to 3.5 times per month, higher than Zomato’s food delivery segment, indicating improved customer retention and engagement.
Conclusion
Zomato’s strategic pivot toward Blinkit signals a bold bet on India’s booming quick commerce market. However, risks like regulatory scrutiny and execution challenges in Blinkit’s rapid expansion must be considered. The stock trades at a premium on forward revenue multiples, pricing in a lot of future growth. Any miss on expectations could cause volatility. Zomato and Blinkit are under review by the Competition Commission of India for alleged anti-competitive (predatory) practices in quick commerce.
In addition, the goal of establishing 2,000 stores by December 2025 carries operational and capital efficiency risks. Despite the challenges and risks involved, Zomato’s aggressive push into quick commerce seems to position it as a market leader in one of India’s fastest-growing segments. Hence, investors must keep all the aspects in mind before they finally invest in it.
