Investment firm Jefferies has maintained a ‘Buy’ rating for Zomato, citing optimism over the foodtech major’s newly launched ‘District‘ app for its ‘going-out’ business. Jefferies has given a price target of INR 335 to Zomato’s shares, an upside of 17.09% from the previous close price of INR 286.10.
Zomato’s District for ‘going-out’ business
Meanwhile, Zomato recently rolled out the ‘District’ app on both Apple’s iOS and Android platforms, aiming to establish the going-out segment as its third-largest B2C business. The app enables customers to discover and reserve tables at restaurants while also booking tickets for movies, sports, live performances, and other events.
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Jefferies explained its optimism for Zomato, citing new use cases emerging from Zomato’s going-out venture, starting with dining out and ticketing. “Starting with dining-out & ticketing, new use cases will emerge. The industry is in its infancy as the current TAM may be limited, but that is how food delivery and quick commerce (QC) were until a while back,” Jefferies added.
The brokerage firm pointed out that the ticketing market is supply-constrained, which offers an opportunity. “Ask the Coldplay and Diljit Dosanjh fans in India who are still trying their luck to get a pass!” it added.
Zomato raises INR 8,500 Cr via QIP
Notably, the food delivery platform has raised INR 8,500 Cr through its first qualified institutional placement (QIP) to boost its growth initiatives. The company plans to allocate INR 2,137 Cr towards setting up and running operations of dark stores and warehouses for its quick commerce business Blinkit.
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Additionally, INR 2,492 Cr will be utilized for advertising, marketing, and branding initiatives across its businesses. Zomato also plans to invest INR 1,769 Cr to strengthen its tech stack, including cloud infrastructure and software.
Since the beginning of this year, Zomato’s stock has been on a steady rise due to better performance and profitable quarters. Year-to-date, the stock has given a 125.06% return to investors. However, at 1:20 PM today, Zomato’s stock was trading 3% lower at INR 277.70 on the BSE.
