Zomato Shares Hit 52-Week High For 2nd Consecutive Day, What Is Fueling The Rally?

Leading online food delivery provider Zomato Ltd shares witnessed back-to-back 52-week high for second day in a row. Current market price of Zomato stock on BSE is Rs 111.80 per share with intraday decline of 1.84%. Zomato shares have been recording a sharp rally in last couple of day as the stock offered a return of 11.07% in last 2-weeks and soared 42.66% in last 3-months. In last 6-months, Zomato shares gained 109%.

IRCTC Ties Up With Zomato: Meanwhile, Indian Railway Catering and Tourism Corporation Ltd on October 17 informed BSE that it has tied up with Zomato for the delivery of pre-ordered meals, according to regulatory filing of IRCTC. Passengers can avail Zomato's service in five railway stations.

According to IRCTC's regulatory filing dated October 17, "Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that in view of widening the range of options available to rail passengers for ordering food of their choice under IRCTC's E- Catering segment, IRCTC has tied up with M/s. Zomato Limited for supply and delivery of preordered meals through IRCTC's E-catering portal as a Proof of Concept (PoC) in the first phase at five Railway stations i.e. New Delhi, Prayagraj, Kanpur, Lucknow & Varanasi." IRCTC took to X platform to share the latest update:

Zomato Stock Performance & Return Over Years: Current market price of Zomato share on BSE is Rs 111.55 per share with intraday dip of 2.06%. Zomato shares hit 52-week high on October 18 and October 17. Before this, Zomato stock traded 52-week high on October 11 and October 12.

Zomato shares opened at Rs 114.25 per share, touched day's high of Rs 115.00 per share, and day's low of Rs 111.40 apiece, respectively. The stock's 52-week high price is Rs 115.00 apiece and 52-week low price is Rs 44.35 per share, respectively. Zomato has a market capitalisation of Rs 95,939.58 crore.

Zomato stock offered a return of 85.73% YTD, gained 77.48% in last 1-year, and fell 22.32% in last 2-years.

Zomato Valuation By ICICI Securities: According to ICICI Securities in its latest report dated October 11, 2023, "We re-iterate our BUY rating on Zomato and increase our 3 stage DCF-based target price to INR 160 from INR 120 led by earnings upgrades, given improved visibility of profitability and sustained improvement in the underlying operating metrics. Zomato remains our top pick in the Indian internet space."

Key Risk: Slowdown in discretionary spending, negative externalities disrupting business operations, added the analyst.

FIIs, DIIs Raise Stake In Zomato: It is worth noting that foreign entities (FIIs) and domestic entities (DIIs) have increased their stakes in Zomato in the last quarter. FII have raised their stake to nearly 54.6% in the food delivery provider in Q2 while DIIs also raised their stake to 13% in Q2.

Zomato Financials: The company for the quarter ended June 30, 2023 announced its consolidated net profit at Rs 2 crore as against the loss of Rs 186 crore reported in the corresponding quarter of last fiscal. It declared a loss of Rs 189 crore for the quarter ended March. Meanwhile, its revenue from operations declared at Rs 2416 crore, up 71% YoY against Rs 1414 crore announced in the year ago period.

About Zomato: It was launched in 2010. Its technology platform connects customers, restaurant partners and delivery partners, serving their multiple needs. Customers use Zomato platform to search and discover restaurants, read and write customer generated reviews and view and upload photos, order food delivery, book a table and make payments while dining-out at restaurants. On the other hand, it provides restaurant partners with industry-specific marketing tools which enable them to engage and acquire customers to grow their business while also providing a reliable and efficient last mile delivery service.

Disclaimer: The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.