Experts predict Zomato will outperform Swiggy in terms of future success.

According to a recent analysis by global trading organization CLSA, meal delivery juggernaut Zomato is thriving. Analysts predict Zomato would outperform Swiggy in key growth areas. Given this bullish outlook, CLSA has set a price target of Rs 248 for Zomato shares, which could result in a return of more than 24%.

How Is Zomato Expanding its Business?

The research highlights many elements that led to Zomato’s lead:

Zomato’s overall order value climbed by an impressive 36% year on year in FY24, taking into account both meal delivery and quick commerce. This is far better than Swiggy’s 26% rise during the same time period.

Boost Your Income: Zomato is processing more orders and earning more money. Swiggy’s adjusted sales climbed by a modest 24% year on year, but its adjusted revenue increased by a staggering 55.9%.Food delivery services are prominent. Zomato looks to have the upper hand even in their primary sector of food delivery. Compared to Swiggy’s double-digit growth in FY24, Zomato’s food delivery arm had a solid 22% YoY gain. This difference, according to experts, is likely to exist even if Swiggy’s future meal delivery value increases by 10% to 20%.

Strength of the Delivery Network: With 418,000 active delivery partners, Zomato’s network is significantly larger than Swiggy’s 387,000. Zomato’s Blinkit offers more dark stores (warehouses for rapid delivery) than Swiggy Instamart does.

Will You Face Any Obstacles Along the Way?

Despite the promising indicators, CLSA has identified a few potential challenges for Zomato:

Cautionary clients: If urban customers reduce their spending, growth may halt.

Swiggy and other companies are always competing for a part of the Indian meal delivery market.

The sector may experience challenges due to the ever-changing regulatory framework.
If the Open Network for Digital Commerce (ONDC) becomes widespread, it may have an influence on Zomato’s commission rates (take rates).

Despite these potential challenges, Clara is optimistic about Zomato’s future, citing its edge over Swiggy. According to their target price, Zomato’s stock has a lot of room for development.

Zomato’s share price is currently Rs 202.20, reflecting a 1.68% rise. The BSE Sensex rose by 0.34%, indicating a generally positive market outlook.