Zomato Inches Towards $11 Bn Market Cap; Shares Touch 52-Week High

Shares of foodtech giant Zomato hit a new 52-week high at INR 105 on the BSE on Monday (September 18), buoyed by a 2% intraday trading jump.

The surge comes on the heels of the company’s first profitable quarter in Q1 FY24, catapulting its market cap past the $10 Bn threshold. Now valued at $10.74 Bn, Zomato ranks among the BSE’s top 100 companies by market cap, a list that features giants like Adani Energy, Tech Mahindra, Grasim Industries, and Tata Motors.

By 1.20 PM IST, Zomato shares were trading at INR 103.47 on the BSE.

We must note that last week, an analyst told Inc42 that Zomato shares would continue their rally and could move up to INR 110-INR 111 this week.

Its shares are currently trading at a level last seen at the end of January last year.

The foodtech giant’s shares were under significant pressure throughout last year, like most other new-age listed tech startups, on the back of an economic downturn and the market’s growing emphasis on profitability.

However, helped by its focus on profitability and finally achieving so, Zomato shares have gained over 74% year to date.

Last week, Equirus Securities initiated coverage on Zomato with a ‘long’ rating and a price target (PT) of INR 135 and said that the startup would become one of the fastest-growing players in India’s internet landscape.

The brokerage also said that Zomato’s dominance in the underpenetrated food delivery space should drive a robust 31% sales CAGR over the FY23-FY28 period.

Bernstein also increased its PT to INR 120 last week from INR 100 earlier, saying Zomato was “raising the profitability bar”.

Meanwhile, Zomato remains focused on maintaining its profitability playbook. In a latest move, it announced the winding up of its Slovakian subsidiary last week.

On the other hand, the foodtech giant has also introduced a platform fee of INR 2 and INR 3 per order, which is expected to further improve its margin, as believe some analysts.