Jio Financial, Zomato may enter Nifty50; check likely inflows, expectations and targets

Jio Financial Services Ltd and Zomato Ltd are likely to be included in the Nifty50 Index in the upcoming rejig of the benchmark index, suggests a report from JM Financial Ltd. The announcement on the changes of the Nifty indices is likely to come in February 2025, with changes effective from March 31, 2025.

According to JM Financial's report, Zomato and Jio Financial Services are likely to replace Bharat Petroleum Corporation Ltd (BPCL) and Britannia Industries Ltd in the Nifty50 pack. Both the counters are likely to witness inflows of $620 million and $356 billion, respectively. However, the likely exclusions including BPCL and Britannia may see outflows of $212 million and $229 million, respectively.

"For the March rebalancing, the index provider assumes an average free-float marketcap that prevailed between the August 1 to January 31 period," said JM. Based on the average free-float market cap that prevailed latest, these changes are expected in the Nifty50 index, it adds.

Ahead of JM Financials' prediction, Nuvama Alternative and Quantitative Research too had predicted Zomato's inclusion in the benchmark index in a note last year. However, Nuvama projected exclusion of Eicher Motors Ltd from the index, instead of Britannia. BPCL remains the likely common exclusion in both the reports.

Shares of Zomato have seen a sharp correction ever since its inclusion in the Nifty50 index. The stock is down about 25 per cent from its 52-week high at Rs 304.70 hit in December 2024. Similarly, Jio Financial Services has wiped out nearly one third of its value from its 52-week high at Rs 394.70 hit in April last year.

Jio Financial Services is set to enter asset management business through a joint venture with Blackrock. KR Choksey Finserv has an 'hold' rating on Jio Financial Service with a target price of Rs 345. The brokerage said that asset quality for NBFCs under its coverage is likely to remain worrisome and NIMs shall be a mixed bag for them.

Similarly, Geojit Financial Services also maintained its 'hold' rating on the stock with a target price 347, citing its premium valuations. Brokerage firms will share the latest views and targets following the Q3 results for the company, which are due later this week.

Anand Rathi Shares and Stock Brokers is expecting about 5 per cent QoQ growth in the food delivery segment for the segment, with 40-50 bps improvement in the adjusted Ebitda margin. It also expects 20 per cent QoQ  growth, with margins contracting 80-100 bps in the quick commerce segment, due to heightened competition and Zepto’s relentless cash burn, which would have resulted in slight market share loss for both players this quarter.

While food delivery would post 6 per cent QoQ GOV growth, Blinkit would post a strong 15 per cent QoQ GOV growth, said Equirus Securities. "We expect sequential adjusted Ebitda margin improvement in food delivery as well as Blinkit to be at 4bps and 21bps respectively," it said.

Zomato continues to remain among the top picks of Anand Rathi, while Equirus Securities has given it a 'long' rating with a target price of Rs 315.