Shares of Zomato saw a 1.74% jump during early trading on November 18, reaching INR 274.30 per share on the Bombay Stock Exchange (BSE), following a positive report from global brokerage firm Morgan Stanley. The brokerage projected that Zomato's stock has the potential to double in value within five years, or even sooner in an optimistic scenario.

Morgan Stanley highlighted several factors driving the stock's strong outlook, including Zomato’s expanding share of India’s quick commerce market, successful execution in both food delivery and quick commerce, a solid financial position, and a large profit pool expected by 2030. These strengths led the brokerage to maintain an “overweight” rating on the stock and designate Zomato as a “top pick” in its sector.

The brokerage also raised its price target for Zomato to INR 355, up from INR 278, reflecting confidence in the company’s dominant market position and its promising growth trajectory in quick commerce.

Zomato's rise is largely attributed to its growing presence in India's rapidly expanding quick commerce market, which is expected to experience substantial growth in the coming years. As of June 2024, Goldman Sachs estimated Zomato’s share of the food delivery market at 56-57%, further reinforcing its strong market position.

While there are short-term challenges, including intense competition and high expansion costs, Morgan Stanley believes Zomato's robust balance sheet and ability to weather competitive pressures will serve as key strengths. Its food delivery segment remains strong, supported by a loyal customer base and solid operational performance.

Zomato's performance has been impressive on the financial front as well. For the year-on-year (YoY) period, the company reported a 68.5% increase in operating revenue, reaching INR 2,848 Cr for the September quarter, up from the previous fiscal year. Zomato’s profit after tax (PAT) also saw a remarkable increase of 389%, climbing to INR 36 Cr.

Additionally, Zomato's verticals have experienced strong growth. The gross order value (GOV) for food delivery rose 5%, reaching INR 9,690 Cr in Q2 FY25, up from INR 9,264 Cr in the June quarter. Blinkit, Zomato’s quick commerce business, saw a 25% quarter-on-quarter (QoQ) increase in GOV, reaching INR 6,132 Cr.

With strong leadership in food delivery and quick commerce, Zomato's growth prospects continue to shine, making it an attractive stock for investors to watch closely in the coming years.