Zomato shares climb over 6% to record high, end 18 of last 21 months in green with 500% gain | Stock Market News

Stock Market Today: Shares of Zomato, the food delivery aggregator, achieved a new milestone in Thursday’s trade on December 5, crossing the ₹300 mark for the first time in intraday trade to touch a fresh record high of ₹304.65, gaining 6.4 per cent and surpassing its previous all-time high of ₹298.25, which was recorded in September.

Today’s surge has boosted Zomato’s market capitalisation to nearly ₹3 lakh crore, driven by a series of positive developments. These include multiple brokerage upgrades and Zomato’s entry into the Futures and Options (F&O) segment.

Additionally, the stock is set to be included in the BSE Sensex index on December 23, 2024, as part of the reconstitution announced by Asia Index Private Ltd, a subsidiary of the BSE.

Global brokerage firm CLSA has maintained its ‘Outperform’ rating on Zomato, raising its target price to ₹370 per share. This comes as several other brokerages have recently increased their target prices, highlighting the company’s strong growth prospects in both food delivery and quick commerce segment.

Earlier, Japanese brokerage firm Nomura has also expressed optimism, lifting its target price from ₹280 to ₹320 while maintaining a ‘buy’ rating. Nomura sees significant room for acceleration in Zomato’s growth, particularly within the quick-commerce business.

It said the company is focusing on expanding its store density in existing markets, with plans to increase its store count by 4X, aiming for 2,000 stores by December 2026.

Domestic brokerage Axis Securities has also kept its ‘buy’ rating on Zomato, setting a target price of ₹350. The brokerage is confident that the company’s continued expansion in food delivery and Blinkit, its quick-commerce arm, will be supported by consistent improvements in profitability and a sharp reduction in losses within both the Hyperpure and quick commerce divisions.

Looking ahead, Axis Securities expects Zomato to achieve strong growth, forecasting revenue, EBITDA, APAT CAGRs of 25 per cent, 60 per cent, and 55 per cent, respectively, over FY25E-FY28E, driven by both volume growth and improvements in realisation during the same period.

Meanwhile, the company on Friday announced that it had raised ₹8,500 crore through a qualified institutional placement (QIP) by issuing 33.64 crore shares at ₹252.62 each. The funds are expected to expand its quick-commerce arm, Blinkit, and bolster its cash reserves to stay competitive.

The company’s cash balance dropped from ₹14,400 crore in FY21 to ₹10,800 crore in the September quarter of FY25, due to past quick-commerce losses, equity investments, and acquisitions, including Paytm’s events ticketing business for ₹2,014 crore. Zomato aims to strengthen its cash reserves to navigate the increasingly competitive market.

Up nearly 500% in just 21 months

The company’s shares have experienced a remarkable 496 per cent return since beginning their one-way bull run in March 2023, rising from ₹51 per share to ₹304.

Over the past 21 months, the stock has ended 18 months in positive territory, with November included. April 2023 saw the largest monthly gain of 27.25 per cent. Looking at its yearly performance, the stock has gained 142 per cent so far in the current year, following a 108.6 per cent increase in CY23.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.