Zomato, Jio Financial Likely to Enter Nifty50; Check Stock Price Targets, Inflows & More
Zomato and Jio Financial Services are expected to be included in the Nifty50 index in the upcoming rebalancing, which is anticipated on Friday, February 21, and will be effective from March 31, 2025.
- Expected Rebalancing: JM Financial forecasts the inclusion of Jio Financial Services and Zomato based on their average free-float market capitalization between August 1 and January 31.
- Exclusions: Bharat Petroleum Corporation (BPCL) and Britannia Industries are expected to exit the index due to lower market capitalization.
Stock Inflows and Outflows
JM Financial anticipates significant stock inflows and outflows around the changes:
- Zomato Inflows: $702 million with 277 million shares likely to be traded. However, Zomato’s stock has dropped by 15% in 2025.
- Jio Financial Inflows: $404 million with 153.8 million shares expected to change hands. The stock has fallen 25% year-to-date (YTD).
- Exclusions: BPCL and Britannia are projected to see outflows of $240 million and $260 million, respectively, with shares sold amounting to 79.7 million (Britannia) and 4.4 million (BPCL).
Stock Performance and Valuations
- Jio Financial Services: The stock rose by 3.6%, closing at Rs 228.95, valuing the company at Rs 1.45 lakh crore. Despite a drop of 42% from its 52-week high, it remains in a growth phase with plans to expand its product portfolio.
- Zomato: The stock closed at Rs 234.10, up by 4.85% on the day, but has declined by 23% from its 52-week high.
Analyst Views and Recommendations
- KR Choksey on Jio Financial: Despite ongoing investments, regulatory challenges, and a scaling phase, Jio’s earnings remain volatile. The firm maintains a ‘hold’ rating and has reduced its target price from Rs 345 to Rs 286.
- Anand Rathi on Jio Financial: Despite a significant correction, the stock shows signs of bottoming out near key support levels. A bullish RSI divergence signals a potential reversal, with a price target of Rs 305.
- Trade Setup: Enter in the Rs 230-240 range with a stop-loss at Rs 199.
Zomato’s Performance and Market Outlook
- Blinkit’s Growth: Zomato’s Blinkit platform is expanding its dark stores rapidly, boosting growth, though profitability may be delayed due to upfront store costs. Nuvama maintains a ‘buy’ rating and sets a target price of Rs 300.
- HDFC Securities View: HDFC suggests Zomato’s execution-heavy model via Blinkit is favorable. However, they place a ‘reduce’ rating with a target price of Rs 235, waiting for a better entry point.
- Macquarie’s Outlook: Zomato’s Q3 earnings fell below estimates, mainly due to higher employee costs and Blinkit investments. Macquarie has an ‘underperform’ rating with a target of Rs 130, citing rising competition in the Q-Com sector.
As Zomato and Jio Financial are set for potential inclusion in the Nifty50, analysts remain cautious due to volatile earnings and competitive pressures. Stock prices will be influenced by market dynamics and upcoming developments.