04 Dec , 2024 By : Debdeep Gupta
Shares of Zomato Limited surged over 2 percent to Rs 287 in morning trade on December 4 after brokerage firm CLSA maintained its outperform rating on the stock and raised its target price to Rs 370 per share, citing robust levers for growth.
With a price target of Rs 370, the international brokerage forecasts an upside potential of over 32 percent from the last close of Rs 280 on the National Stock Exchange. Zomato shares have rallied 131 percent since the start of the year.
"Swiggy's Q2 results showed a 30 percent year-on-year increase in overall B2C gross order value (GOV), compared to a 23 percent rise in Q1 FY25. In the quick commerce segment, Swiggy's GOV grew 76 percent YoY, trailing Zomato's Blinkit, which reported a 122 percent increase," CLSA said.
It added that in food delivery, Swiggy's GOV rose 15 percent YoY, while Zomato outpaced it with a 21 percent increase. Both platforms saw similar sequential improvements, with Swiggy at 6 percent and Zomato at 5 percent. CLSA notes that while the gap between Swiggy and Zomato has stopped widening, Zomato remains 81 percent larger in quick commerce GOV.
Last week, the company raised Rs 8,500 crore through a Qualified Institutional Placement (QIP), allocating 33.65 crore equity shares at Rs 252.62 per share.
A significant portion of the proceeds -- Rs 2,137 crore -- will be directed towards expanding the operations of Zomato’s quick commerce unit Blinkit, particularly through investments in dark stores and warehouses. Additional funds will also be utilized for advertising and marketing as Zomato looks to solidify its position in the food delivery and quick commerce space.
At about 10 am, Zomato shares were trading at Rs 287, higher by 2.7 percent from the last close on the NSE.
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