Zomato Share Price Climbs for Sixth Consecutive Session
Zomato’s stock price surged over 27% in the past month, reaching record highs and providing investors with returns of over 61% for the year. The bullish trend continued as the share price rose by more than 1% in early trading on Friday, hitting a fresh peak of ₹199.75 per share on the BSE.
JM Financial Raises Target Price
JM Financial, maintaining a ‘Buy’ rating on Zomato’s stock, revised its target price to ₹260 per share from ₹200 previously. The brokerage firm attributed this adjustment to the remarkable performance of Blinkit, Zomato’s quick commerce business, which has been experiencing exponential growth.
Blinkit Growth Trajectory
JM Financial highlighted Blinkit’s significant growth potential, anticipating its three-year target price to reach ₹400 per share. The firm emphasized Blinkit’s strategic position in the hyperlocal delivery sector, benefiting from robust industry dynamics. Despite increased investments, Blinkit’s balance sheet remains robust, boasting a net cash reserve of ₹12,000 crore as of December 2023.
Investment Outlook for Zomato
Zomato remains a preferred pick for JM Financial in the listed Internet space, primarily due to its promising prospects in the hyperlocal delivery segment. The firm underscored Zomato’s diversified business model, which is not reliant on the growth of specific players or changing consumer preferences.
Blinkit Expansion Strategy
JM Financial anticipates Blinkit to intensify its investments in expanding its dark-store network, adding retail categories, and penetrating deeper into product offerings. Post break-even at Adjusted EBITDA levels by Q1FY25, Blinkit is expected to accelerate its growth trajectory significantly, leveraging increased investments for expansion.
Long-Term Outlook for Blinkit
While Blinkit’s profitability in the near term may be lower compared to Zomato’s food delivery business, JM Financial believes it will command premium profit multiples in the long run. Blinkit’s focus on retail commerce and its potential for sustained growth position it favorably for future profitability.
Market Performance and Projection
Zomato’s stock price has demonstrated remarkable resilience and growth, reflecting investor confidence in the company’s prospects. With a surge of over 274% in the past year, Zomato’s stock has emerged as a multibagger, attracting considerable attention from investors.
Current Trading Status
As of 11:05 am, Zomato’s share price was trading 1.24% higher at ₹199.25 apiece on the BSE, maintaining its upward trajectory amidst positive market sentiment and optimistic outlook from analysts.
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