Zomato Stock Surge: 5 Powerful Reasons Goldman Sachs Sees Remarkable 44% Upside Potential

Eternal Ltd., which is the mother company of food delivery giant Zomato, posted another robust trading session on Thursday, 18 September, as the company shares went up by about 3 per cent. This was the fourth straight gain-making session in the stock and was an added boost to the confidence of the investors in the strategic path and future of the company.

The Zomato stock run is a persistent phenomenon that has attracted the notice of both institutions and retail investors in equal measure, especially after the reaffirmation of the long-term prospects of the firm by Goldman Sachs.

Goldman Sachs Reinforces Bullish Stance

The global investment banking firm Goldman Sachs has reversed its Buy rating on Eternal Ltd., and has concurrently increased the price target to 360 (340). This new target signifies a possible upslope of about 10% of the price on Wednesday, which is evidence of the brokerage not giving up on the path of the company.

Secondly, more impressively, the bull-case scenario of Goldman Sachs estimates a 44% upside potential, which means that the share can give a spectacular result to the investor under the perfect circumstances. This is a positive perspective because of a number of core reasons that Zomato is poised to grow.

The growth momentum of Blinkit is also healthy, according to the research report of Goldman Sachs analysts. The current FY27 net order value (NOV) of Blinkit, as projected by the brokerage, now follows an 80% increase over the same projections 12 months ago, and an unbelievable 260% increase over the same projections 24 months ago.

Blinkit: The Growth Engine Behind Zomato Stock Surge

Blinkit, a fast-commerce subsidiary of Zomato, has become one of the key drivers of the current Zomato stock spike. Its fast growth rate and rising operational metrics have earned applause in the industry, analysts say. Goldman Sachs projects an increase in the number of stores to two or three in the next two to three years, which will help capture the market share of Blinkit a great deal.

The brokerage feels that this dynamic of growth has not been well incorporated in the current valuation of Zomato, and it is an opportunity for investors who see the value proposition underlying it. The quick commerce segment has shown impressive strength and flexibility in the competitive environment in India.

There are a number of major reasons which justify the optimistic estimation of Goldman Sachs:
The competitive landscape has remained relatively stable, which has seen Blinkit concentrate on operational excellence instead of the hard-driving price rivalry. The moderate levels of sequential store expansion have allowed allocation of resources and operational efficiency to more sustainable levels. The shift to a first-party (1P) is a strategic reorientation which has the potential to increase the profitability rates.

Margin Expansion and Profitability Timeline

Goldman Sachs believes that Blinkit would make huge margin improvement in its operations, and thus expects to see 240 basis points growth in NOV in the next two quarters. This has been enhanced by the operational efficiencies, enhanced inventory management and strategic change towards the first-party model.

A milestone in the investor sentiment that the brokerage has singled out is that Blinkit will break even in terms of EBITDA by December 2025. This timeline is one of the major catalysts that may further drive the Zomato stock explosion, because profitability targets can frequently cause institutional money to flow and analysts to upgrade.

According to industry observers, the quick commerce industry needs huge operational discipline and strength in positioning in the market to break even in terms of EBITDA. The trend of the management of Blinkit to this direction shows the success of strategic decisions and execution strengths.

Market Performance and Investor Sentiment

The trading session of Thursday recorded a rise of Eternal Ltd. share by 2.92 per cent at 337.85, a continuation of the good trend that has been experienced in recent trading sessions. Its stock has given spectacular returns of 22% in the year to date and is far better than the market indices generally, and clearly reflects the strong investor confidence.

The steady increase in the upward movement is the result of the increased institutional and retail investor awareness of the diversified business model of Zomato and the opportunity in the fast-growing Indian digital commerce landscape. Fast trade, more specifically, has demonstrated phenomenal growth prospects as the purchasing pattern inclines towards convenience-based buying habits.

According to the market analysts, the valuation is still attractive to long-term investors as it provides them with good opportunities for entry, especially following the positive forecasts made by Goldman Sachs and the growing market prospects of the company.

Strategic Implications and Future Outlook

The positive sentiment among analysts towards Zomato is long-term, and this has been driven by the increased confidence in the digital economy in India and Zomato’s capacity to exploit new opportunities. The emphasis on the growth path of Blinkit shows that shareholders of a company can develop significant shareholder value through diversification strategies.

According to the analysis provided by Goldman Sachs, Zomato is well-positioned in the long term to dominate the market because of its combined food delivery and fast business model. Additional network logistical systems combined with technology and brand equity bring about a high competitive advantage.

With the Indian quick commerce market steadily growing, firms such as Zomato are likely to enjoy a sustained interest of both investors and a high valuation as it manages to juggle between growth programs and pathway-to-profitability programs.