Zomato Shares Jump Over 4% To Touch Intraday High At INR 269.75

Shares of Zomato rallied 4.7% to touch an intraday high of INR 269.75 apiece on the BSE today (August 23), a day after the foodtech major shut its intercity offering ‘Legends’ over a month after its relaunch.

The shares maintained their price surge even till publishing of this article (11.08 AM) at INR 269 on BSE, against the previous close at INR 257. 

On Thursday (August 22), Zomato shares reached an intraday high of INR 267 on the back of its deal with fintech giant Paytm to buy the latter’s entertainment ticketing business for INR 2,048 Cr.

So far this week, Zomato shares have touched the highest share price of INR 280 during its Monday trading session on August 19. 

The 52-week high and low price for its stock were at INR 280 and INR 88.16, respectively. 

Meanwhile, several brokerage firms outlined their rating and target price for Zomato. While the brokerage firm Motilal Oswal gave a buy rating to Zomato setting the target price at INR 300, Morgan Stanley gave its rating as overweight with a target price of INR 278.

The foodtech major has also maintained its stellar run in the markets lately. Just a day after the Q1 FY25 results, Zomato’s market capitalisation was closer to the $30 Bn mark. 

Now non-operational, Zomato relaunched its intercity food delivery service in Delhi NCR and Bengaluru last month with plans to expand to other cities as well.

“After two years of trying, not finding product market fit, we have decided to shut down the service (Zomato Legends) with immediate effect,” Deepinder Goyal announced on X Yesterday. 

Before that, it launched ‘Intercity Legends’ in August 2022 to deliver popular dishes from cities across India to different regions. 

This move of discontinuing service is in alignment with Zomato’s strategy to experiment with new offerings, particularly for the food delivery vertical, and shut those which are not getting enough traction.

For instance, in April, it launched a ‘large order fleet’ to deliver large orders for up to 50 people. Later, it expanded its home-cooked meal service ‘Zomato Everyday’, and is also piloting priority deliveries in Bengaluru and last mile deliveries for office goers. 

Besides, it also rolled out a partner restaurant focused initiative ‘Restaurant Services Hub‘ earlier in June. Meanwhile, it suspended its logistics business ‘Xtreme’ last month. 

Not to mention, Zomato has been on a spree of launching new features including daily payouts for restaurants, an all-electric large order fleet, last mile deliveries for office goers, among others.

On the financial front, Zomato’s consolidated net profit zoomed multifold year-on-year (YoY) to INR 253 Cr in Q1 of FY25 after posting its maiden profitable quarter in Q1 FY24. Sequentially, it rose nearly 45% from INR 175 Cr in the last quarter.

Moreover, Zomato’s bet on its acquired subsidiary Blinkit also seems to have paid off as the (gross order value) GOV of Blinkit for Q1 FY25 increased 130% as against Zomato’s B2C vertical GOV growth of 53%. 

While Zomato’s revenue from operations jumped 74% to INR 4,206 Cr in Q1 FY25 from INR 2,416 Cr in the corresponding quarter last year, Blinkit witnessed a massive 145% jump YoY and a 22.5% rise QoQ in its revenue to INR 942 Cr in the reported quarter.