Zomato Stock Performance
Zomato shares have delivered an impressive 131% year-to-date (YTD) return in 2024, making it a multibagger stock. On Wednesday, the stock rose by another 3%, reaching an intraday high of ₹289.70, approaching its September peak of ₹298.20.
The growth is fueled by strong investor interest and strategic business updates from the food delivery giant.
Major Highlights
- 131% YTD Growth: Zomato shares are nearing their all-time highs.
- QIP Fundraising: The company raised ₹8,500 crore through Qualified Institutional Placement (QIP) at ₹265.91.
- Blinkit Expansion: Significant investments are being directed toward its quick commerce arm, Blinkit.
Strategic Investments in Blinkit
Zomato plans to invest ₹2,100 crore in Blinkit’s capital expenditure (capex) from FY2026 to FY2028. This includes developing dark stores and warehousing capabilities.
Blinkit Key Metrics:
- Dark Store Area: Blinkit operates 2.5 million square feet across its network.
- Revenue Efficiency: Each square foot generates ₹89,500 in GMV, indicating strong operational efficiency.
- Future Plans: Expansion of dark stores and warehouses to boost operations.
Brokerage Recommendations
Kotak Institutional Equities retained its ‘Buy’ rating for Zomato with a target price of ₹315, offering a potential upside of 9% from current levels.
Key Growth Metrics:
- Customer Growth:
- Power customers (annual ordering frequency of 50+) grew by 24% YoY to 34 lakh in FY2024.
- Unique transacting customers rose 8.6% YoY to 6.3 crore with an average 12 orders per customer annually.
- Market Potential: Only 10% of Indian internet users order food online compared to 50-55% in markets like the US and China.
Strategic Shifts
Zomato is focusing solely on food delivery by moving its restaurant and event booking services to its District app. This consolidation aligns with its growth strategy and positions the company for sustained success.
Should You Invest in Zomato?
With Zomato’s impending Sensex inclusion, robust customer growth, and untapped potential in India’s food delivery market, analysts believe the stock will continue its upward trajectory.
The ₹315 target set by Kotak Institutional Equities highlights a promising future for the stock, making it an attractive investment opportunity for long-term growth.
