Analyst revisions kept stocks of Zomato, Biocon, and ONGC in focus on Monday.
While Zomato’s share price was down by 4.8% after Jefferies downgraded the stock to “hold”, Biocon’s share price was trading higher by 7.8% after receiving an upgrade from Jefferies to “underperform” while lifting its price target by a hefty 43% to Rs 400.
State-run oil and gas explorer Oil and Natural Gas Corporation (ONGC) was up by 4.8% after global brokerage CLSA upgraded the stock to “high-conviction outperform”.
Zomato’s target price cut
Jefferies has slashed Zomato’s price target by 18% to ₹275, owing to the likelihood of the stock consolidating in 2025.
The brokerage said that while the stock’s valuations are not ‘excessively expensive’ in the face of its strong execution and opportunity, the rising competition in the quick commerce space is worrying.
It cautioned that aggressive strategies by existing players and the entry of new competitors could lead to higher discounting, posing risks to Zomato’s medium-term profitability.
In addition to Zomato’s Blinkit, competitors like Swiggy’s Instamart, Zepto, Amazon, and others are actively competing for a share of the quick commerce market.
As a result, Jefferies has sharply reduced Blinkit’s EBITDA forecast for FY26-27 and halved its target multiple for Blinkit to 6x.
For Zomato overall, the brokerage cut its EBITDA estimates by 12% for FY26 and 15% for FY25, alongside profitability estimates reduced by 17% for FY26 and 18% for FY27.
Earnings Per Share (EPS) projections were also slashed by 20% for FY26 and 21% for FY27.
On the other hand, Morgan Stanley reiterated its ‘overweight’ rating on Zomato, maintaining a price target of Rs 335 for the stock.
The brokerage also singled out Zomato as its top pick within India’s internet sector.
Morgan Stanley anticipates Zomato’s ongoing focus on profitability and its improving growth visibility to drive a 33% revenue CAGR over FY25-27, despite the intensifying competition.
The firm remains confident in Zomato’s solid track record of profitability and its consistent growth in monthly active users.
Biocon stock upgraded
Jefferies upgraded Biocon’s rating from “Underperform” to “Hold,” raising the target price to Rs 400 from the previous Rs 280.
Biocon’s biologics unit in Bengaluru has gotten a green signal from the US Food and Drug Administration (USFDA) which has granted the company a “Voluntary Action Indicated” (VAI) status.
VAI is considered good for companies as it means they can continue business operations without additional regulatory hurdles.
Apart from the regulatory clearance, Biocon has also received the approval of the company’s biosimilar Stelara, slated for a launch next month.
Biocon’s subsidiary–Biocon Biologics received approval from the USFDA to launch its biosimilar version of Janssen’s Stelara in early December.
The approval paves the way for the launch of the biosimilar, potentially enhancing the company’s revenue and profitability despite intense competition from rival products.
The USFDA has already approved five Stelara biosimilars, all anticipated to enter the market in Q4 FY25, with Amgen’s version slated to debut first.
Analysts at Jefferies note that the approval boosts growth prospects for Biocon’s biologics business.
ONGC upgraded to high-conviction stock
Global brokerage CLSA reiterated its bullish outlook on the state-run Oil and Natural Gas Corporation (ONGC) and upgraded the stock to “high-conviction outperform”.
CLSA has set a target price of Rs 360 per share, a potential upside of nearly 42%.
According to reports, CLSA stated that the Eastern Offshore Field is projected to reach peak production by the end of 2025, leading to a considerable increase in ONGC’s domestic oil and gas output by approximately 10% and 20% respectively.
The brokerage also highlighted that new gas discoveries and a rising share of gas from well interventions are expected to improve blended gas realisations.
Additionally, the removal of the windfall tax could enable ONGC to achieve realisations above $75 per barrel if crude oil prices recover.
Despite these multiple positive triggers, ONGC is trading at a substantial discount, compared to its historical and peer average valuations.
The brokerage further said that the stock offers an attractive dividend yield of 6%.
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