BENGALURU, July 27 Reuters Shares of India39;s Zomato surged nearly 7 on Wednesday after several analysts projected higher profits in the near term, recovering some losses from a sharp drop in their value after a share lockin period ended this week.

Ant Groupbacked Zomato made a strong debut on the Mumbai market last year, but concerns about its valuation have brought down its market value by about 68 since then.

We believe its next phase of growth will be driven by higher ordering frequency from its existing user base, analysts at Credit Suisse said, adding that low reliance on new customers will minimize customer acquisition costs.

On Tuesday, analysts at Jefferies said the stock makes a great case for long term investors to buy, while J.P.Morgan said the company could also see a decrease in cash burn rates.

Some investors, however, cast doubts over Zomato39;s profit run as it absorbs its recent acquisition of local grocery delivery service Blinkit and competes with SoftBankbacked Swiggy.

The bigger issue of capital allocation discipline is something that is a concern for us, said Keyur Majmudar, a managing partner at India39;s Bay Capital.

In June, Zomato said it would buy Blinkit, aiming to improve market share in the quickdelivery business, which aims to deliver groceries and other daily essentials to customers within a few minutes of ordering. 

They have capital committed to quick commerce, which is going to bleed given the nature of that business and…