Zomato, the foodtech giant, marked a significant milestone on Monday, (September 18), as its shares on the BSE soared to a new 52-week high of INR 105, driven by a 2% intraday trading surge.
Following the company’s first profitable quarter in Q1 FY24, Zomato has experienced a remarkable surge, propelling its market capitalization beyond the $10 billion mark. With a current valuation of $10.74 billion, Zomato has secured a place among the top 100 companies on the BSE by market capitalization, sharing this prestigious list with industry giants such as Adani Energy, Tech Mahindra, Grasim Industries, and Tata Motors.
At 1:20 PM IST, Zomato’s shares were being traded at INR 103.47 on the BSE.
The current trading level of its shares is reminiscent of the levels observed at the end of January last year.
Throughout the previous year, the foodtech giant’s shares faced substantial downward pressure, similar to many other recently listed tech startups. This was primarily due to an economic downturn and the market’s increasing focus on profitability.
Nonetheless, with its dedicated focus on profitability, and the successful attainment of this goal, Zomato shares have surged by more than 74% year-to-date.
Last week, Equirus Securities kicked off their coverage of Zomato with a ‘long’ rating, along with a price target (PT) of INR 135. They confidently predicted that the startup would emerge as one of the fastest-growing players in India’s internet landscape.
The brokerage additionally emphasized that Zomato’s strong position in the underexplored food delivery sector is expected to fuel an impressive 31% compound annual growth rate (CAGR) in sales from FY23 to FY28.
Last week, Bernstein revised its price target (PT) for Zomato, raising it from INR 100 to INR 120. They cited Zomato’s elevation of the profitability standard as the reason for this adjustment.
In the meantime, Zomato continues to concentrate on upholding its profitability strategy. In its most recent development, the company announced the closure of its Slovakian subsidiary last week.
Conversely, the foodtech giant has introduced a platform fee of INR 2 and INR 3 per order, a move that is anticipated to enhance its margins, according to the assessments of certain analysts.