Last Updated:
Zomato’s shares surged 7% early trading today, following its inclusion in the prestigious 30-stock Sensex index; Know latest target price
Zomato Share Price
Zomato’s shares surged 7 per cent early trading today, following its inclusion in the prestigious 30-stock Sensex index and the approval for its Rs 8,500 crore Qualified Institutional Placement (QIP). The stock opened at Rs 273, up from the previous close of Rs 264.15, and hit an intraday high of Rs 282.85, marking a 7% rise.
A total of 14.70 lakh shares changed hands, resulting in a turnover of Rs 41.79 crore on the BSE. The company’s market capitalization increased to Rs 2.47 lakh crore on Monday.
The stock’s outlook remains positive in both the short and long term, as it is trading above key moving averages—5-day, 10-day, 20-day, 50-day, 100-day, and 200-day.
Currently trading near its 52-week high of Rs 298.20, reached on September 24, 2024, Zomato’s shares have soared by 338 per cent over the past two years, and have risen by 147.30 per cent in the past year. The stock has demonstrated low volatility, with a beta of 0.7 in the last 12 months.
Zomato Joins the Sensex
On Friday, BSE’s Asia Index Private Ltd, a fully owned subsidiary, announced the reconstitution of several indices, including BSE 100, BSE Sensex 50, and BSE Sensex Next 50. Zomato’s addition to the 30-stock Sensex follows a remarkable 130 per cent stock price increase over the past year, outpacing the Sensex’s 12-month return of 20 per cent. For comparison, shares of JSW Steel have gained 27 per cent over the same period.
BSE also revealed changes to other indices, such as BSE SENSEX 50, BSE SENSEX NEXT 50, and BSE 100. Ashok Leyland, PI Industries, IDFC First Bank, IRCTC, UPL, and APL Apollo Tubes will be dropped from BSE 100, with Jio Financial Services, Suzlon Energy, Adani Green Energy, Adani Power, Samvardhana Motherson, and PB Fintech joining. These changes will take effect on December 23. Additionally, HDFC Life, BPCL, and LTI Mindtree will be removed from BSE SENSEX 50, and replaced by Zomato, Jio Financial, and HAL.
Zomato’s Rs 8,500 Crore QIP Receives Shareholder Approval
Zomato’s shareholders have approved the proposal to raise Rs 8,500 crore through a Qualified Institutional Placement (QIP). This funding, initially approved by Zomato’s board in October, is intended to strengthen the company’s balance sheet. Zomato had reported a decline of Rs 1,726 crore in cash reserves during the September quarter, largely due to the Rs 2,014 crore acquisition of Paytm’s entertainment ticketing business.
Analysts’ View
Several brokerages have raised their target prices for Zomato, citing strong growth prospects in both the food delivery and quick commerce sectors, which have propelled the stock’s rise.
In its latest report, Nomura increased its target price from Rs 280 to Rs 320, maintaining a “buy” rating. The firm sees significant room for growth in Zomato’s quick-commerce business, which is expanding its store density. The company aims to increase its store count fourfold, targeting 2,000 stores by December 2026.
Morgan Stanley has reaffirmed its ‘overweight’ rating on Zomato and raised its target price to Rs 355, up from Rs 288 per share. The global brokerage expects the company to maintain its nearly 40 per cent market share, despite rising competition. It anticipates that Zomato will achieve EBITDA breakeven in the next two to four quarters, reflecting substantial investments in expansion.
Morgan Stanley forecasts margins of 2.2 per cent by FY2027 and 5.1 per cent by FY2031, with the potential for an annual profit pool of around $1 billion by 2030. The brokerage values Zomato’s Blinkit business at Rs 212 per share, compared to the market’s implied value of Rs 120 per share. The firm sees a downside support at Rs 160 (down 35 per cent from the current market price) and potential upside of 37 per cent to its price target.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
