Zomato Ltd. is the month’s idea for Emkay Global Financial Services, as the Quick Commerce platform will benefit from the expected rebounds of discretionary consumption in late 2025 and from the high value captures by digital disruptors of consumer business.
Zomato’s management discovered the opportunity early in quick commerce compared to admirable peers, according to Emkay Global Financial Services. The company also has a track record of innovation and execution.
Quick commerce is a bigger opportunity than modern retail and e-commerce, as it disrupts common trade. According to Emkay Global, two or three existing leaders need to dominate after the first period of intense competition.
Low or low profitability is not a cause for concern. An inherent feature of internet businesses is that they have significant losses in the early stages, leading to operational leverage-driven profitability as the business matures, the broker said.
According to Emkay Global Financial Services, Blinkit has additional moats for its complex quick commerce fulfillment model. Its topline growth and market share are key metrics at this stage. The brokerage expects losses to continue for more quarters. “The surprise could be a profit-positive intervention by Zepto when an IPO occurs.”
Zomato’s 17% year-on-year increase, total order value food delivery for the third quarter of the ongoing fiscal year was overwhelming. However, this is only one-time from excessive seasonal pressure and a general decline in consumer spending. Discretionary consumption will recover in fiscal year 2026, the broker said.
