Zomato Stocks Soar to Record High, Experts Predict Continued Dominance

Zomato, the well-known food delivery platform, experienced a second consecutive surge in its share prices during Friday’s trading session. At its highest point, the stock increased by nearly 5%, reaching an all-time high of ₹173.50, compared to the previous day’s close of ₹165.50. This occurred despite uncertainties surrounding the company’s strategic decisions.

Industry experts indicate a favourable change in the overall sentiment towards Zomato due to the company’s consistent outperformance in terms of quarterly expectations. Sachin Dixit, an internet research analyst at ”JM Financial, highlights that the investors’ recognition of Zomato’s efforts and an increasing consumer affinity towards its business model are the main reasons behind this shift.”

Elara analyst Karan Taurani emphasizes Zomato’s “consistent earnings improvement” and its commitment to growth targets, setting it apart from competitors lacking a clear path to profitability.

Experts predict Zomato will maintain its dominance with over half of the market share in food delivery, outperforming IPO-bound Swiggy. The acquisition of Blinkit, Zomato’s quick-commerce business, in 2022 is expected to contribute to the company’s growth, achieving EBITDA positivity in the next fiscal year.

Highlighting Zomato’s impressive Q3 results, the company reported a net profit of ₹138 crore for the quarter ending December 31, 2023, a substantial improvement from the ₹347 crore net loss in the same period the previous fiscal year. The consolidated revenue from operations for Q3 reached ₹3,288 crore, a notable increase from ₹1,948 crore in the corresponding period last year, according to Zomato’s regulatory filing.