Zomato share price surged over 4% to touch a 52-week on Monday's session after a day after the food delivery aggregator said it was increasing its platform fee to ₹6 from ₹5. It is anticipated that the new platform fees, which will be implemented in a few areas like Bengaluru and Delhi, would have a somewhat beneficial effect on the business's profitability. On Monday, Zomato became a member of the exclusive group of companies with a market capitalisation (m-cap) of ₹2 trillion. Zomato share price opened at an intraday low of ₹225 apiece on BSE, the stock touched an intraday high of ₹232 apiece. In 2024, Zomato's share price has increased by almost 83% thus far.
“Zomato share price has recently formed a Higher Top Higher Bottom structure and is thus in an uptrend. The 20 DEMA at 206 is a good support for the near term while resistance could be seen around ₹245-250 zone,” said Ruchit Jain, Lead Research Analyst at 5paisa.
Trendlyne data shows that during the last year, the stock price increased by 173.8% and outpaced its sector by 129.31%.
According to Kushal Gandhi, Technical Analyst, StoxBox, Zomato share price has surged by over 450% following its all-time low in July 2022. After a bullish breakout from its previous all-time high of 169, the stock experienced a brief accumulation phase. This suggests a potential for further bullish momentum and the continued support of committed investors. The daily and higher timeframe RSI levels are well above their median, indicating strong upward momentum. With improving EPS, high relative price strength, and strong buyer demand, we recommend buying Zomato with a target price of ₹265 and a stop loss of ₹211.
With operations in 23 other nations, Zomato is a well-known food aggregator in India. Due to strong performance in several important areas, revenue increased 73.3% YoY in Q4FY24 to reach ₹3,562 crore. With platform fees introduced, greater average order values, increased topline, and efficient cost control, EBITDA reached ₹86 crore.
A few weeks prior to its Q4 results, the business raised the platform cost from ₹4 to ₹5 per order, a 25% increase, with effect from April 20.
According to brokerage company Geojit Financial Services, Zomato anticipates significant growth in its rapid commerce and meal delivery sectors. Zomato's prospects are bright thanks to its growing customer base, increasing order frequency, growing network of delivery partners, opening of additional outlets, unrealised potential, and operational leverage.
After the company released its Q4 earnings, the brokerage reiterated its BUY recommendation on the stock and updated its target price to ₹220, which the stock has already surpassed.
“Zomato has successfully scaled its operations, driven by growth across all segments and improved profitability. The company expects its food delivery business to display a strong performance, owing to scale improvements, growing customer base, increased order frequency and operational efficiency. The quick commerce business is expected to thrive, owing to the addition of new stores. With rising customer base, increasing delivery partners and significant untapped market potential, Zomato is poised for continued success,” the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
