A Year To Remember: How Zomato Made A Roaring Comeback After 2022 Bloodbath

A Year To Remember: How Zomato Made A Roaring Comeback After 2022 Bloodbath

SUMMARY

While 2023 has turned out to be a remarkable year for new-age tech startup stocks, Zomato has shone the brightest so far this year

Share prices of Zomato doubled in 2023 on the back of improving financials and the company reporting two back-to-back profitable quarters

Despite the big gains this year and stake sales by some of the major early backers, the Deepinder Goyal-led company looks set to continue its upward march on the bourses in 2024

“If a business does well, the stock eventually follows.” –  Warren Buffet. There is no better case study for this quote in recent times than foodtech giant Zomato’s journey on the bourses in 2023.Amid the global economic slowdown, the year 2022 was all about investors questioning Zomato’s various business decisions, the biggest among them being its acquisition of Blinkit. However, to investors’ delight, Zomato figured out the sweet spot and its path in 2023.Amid its business experiments, the company reporting two consecutive profitable quarters in Q1 and Q2 FY24 proved to be the ultimate game changer. It further boosted the stock price, helping Zomato surpass its listing price of INR 115 at the beginning of November.Zomato’s quick commerce business Blinkit, whose profitability was one of the major concerns for investors, also turned contribution positive for the first time in Q2 FY24. Zomato sees Blinkit achieving adjusted EBITDA breakeven by Q1 FY25, while Dalal Street believes that Zomato is well on track to achieve this target.As per Zomato’s shareholding data for the quarter ended September 2023, as many as 28 mutual funds held a 10.56% stake (almost 91 Cr shares) in the company. A year ago, 20 mutual funds held a mere 4.57% stake in the company.“If anyone wants to buy a new-age IT stock, Zomato is my favourite pick given its other ventures such as Blinkit and Hyperpure (B2B business) are also doing well now. Besides, Zomato has launched a new courier service, which is also expected to be a game-changer,” he said.

While 2023 has turned out to be a remarkable year for new-age tech startup stocks, Zomato has shone the brightest so far this year. Not to mention, players like Paytm, RateGain, Delhivery, and PB Fintech, too, have witnessed their fair share of rallies after the bloodbath of 2022.

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