Brokerage Maintains Buy on Zomato a Day After Goyal’s Exit | Republic Business Stock Update

HDFC Securities has maintained its Buy (ADD) rating on Zomato, a day after founder and CEO Deepinder Goyal exited the company’s board, citing a continued recovery in food delivery and a key milestone achieved by quick commerce arm Blinkit, which turned operationally profitable for the first time in Q3FY26.

In its post-results note, the brokerage highlighted that Zomato’s overall B2C net order value (NoV) rose around 55% year-on-year to ₹257.3 billion in Q3FY26, in line with expectations, reflecting strong execution across core businesses.

Food Delivery Recovery Gathers Pace 

Zomato’s food delivery business continued its recovery momentum during the quarter, with food delivery NoV rising 16.6% year-on-year to ₹98.5 billion, accelerating from 13.8% growth in Q2FY26.

HDFC Securities noted that food delivery contribution margin and adjusted EBITDA margin remained largely stable quarter-on-quarter at 10.4% and 5.4% of NoV, respectively. Improved demand conditions, higher order frequency among Gold members following a lower minimum order value, and continued customer activation efforts supported growth.

Monthly transacting users (MTUs) in food delivery increased 3.3% quarter-on-quarter to 24.9 million, while take rates improved 62 basis points quarter-on-quarter to 31%, led by higher platform fees. Adjusted EBITDA from food delivery rose 5.6% sequentially to ₹5.31 billion.

Blinkit Turns EBITDA Positive

Blinkit emerged as the key highlight of the quarter, with the quick commerce business achieving adjusted EBITDA breakeven for the first time since inception.

Blinkit’s NoV grew 13.9% quarter-on-quarter and 121% year-on-year to ₹133 billion, despite a moderation due to GST rate rationalisation (around 300 basis points impact) and a shift of the festive season to the previous quarter. On a like-for-like basis, NoV growth remained above 130% year-on-year, the brokerage said.

Operational metrics also strengthened, with monthly transacting users rising 13.5% quarter-on-quarter to 23.6 million and order volumes increasing 9.3% sequentially to around 243 million. Net average order value rose 4.4% quarter-on-quarter to ₹547.

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Blinkit’s adjusted revenue jumped 23.9% quarter-on-quarter to ₹122.6 billion, reflecting its accelerated transition toward an inventory-led model, which now accounts for around 90% of NoV, up from 80% in the previous quarter.

Contribution margin improved 89 basis points quarter-on-quarter to 5.5%, while adjusted EBITDA margin improved 137 basis points to 0%, supported by supply chain efficiencies, operating leverage, a favourable mix of higher-margin long-tail categories, and the shift from marketplace to owned inventory. Blinkit reported an adjusted EBITDA profit of ₹40 million, compared with a loss of ₹1.56 billion in Q2FY26.

During the quarter, Blinkit added 211 net dark stores, taking the total store count to 2,027. While this was slightly below guidance due to construction restrictions and festive disruptions, management reiterated its target of 3,000 dark stores by March 2027, with potential to scale further if competitive intensity eases.

Consolidated Performance and Outlook

At the consolidated level, Zomato’s adjusted EBITDA rose 27.7% year-on-year to ₹3.64 billion, with an adjusted EBITDA margin of 2.2%, partly impacted by continued investments in newer businesses such as Going-out and Bistro.

The brokerage also flagged a change in leadership structure, noting that Blinkit CEO Albinder Dhindsa will replace Deepinder Goyal as Group CEO from February 2026.

HDFC Securities said it has revised its adjusted EBITDA estimates upward by around 8% for FY27 and 2% for FY28, reflecting improving profitability trends. The brokerage maintained its ADD rating with a sum-of-the-parts target price of ₹340 per share, valuing food delivery at 45x March 2028 EV/EBITDA and Blinkit at 1.5x March 2028 NoV.

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