Zomato Soars to New Heights: Record High & Strong Q2 Results (Stock Up 4.5%)

Zomato Soars to New Heights: Record High Shares of food delivery giants Zomato and Swiggy surged to new record highs on December 5, fueled by brokerage upgrades and promising growth prospects. CLSA maintained its ‘outperform’ rating on Zomato and raised its target price to ₹370 per share, suggesting a potential upside of over 32% from its last closing price of ₹280 on the NSE. Since the start of the year, Zomato’s stock has soared by 131%. By 11:15 am, Zomato shares were up 3.67% at ₹296.85, after reaching an all-time high of ₹299.4.

Bernstein also issued an ‘outperform’ rating for Zomato, setting a target price of ₹335. The firm highlighted Zomato’s broader city presence compared to Swiggy, though Swiggy boasts higher user frequency and greater gross order value (GOV) per restaurant.

Swiggy’s recently listed shares climbed 9% to ₹567.55 by 11:25 am, following the company’s announcement that its Q2 net loss had narrowed year-on-year. CLSA noted Swiggy’s GOV rose 30% YoY in Q2, compared to 23% in Q1 FY25, with its quick commerce arm Instamart growing by 76% YoY. However, Zomato’s Blinkit outpaced it with a 122% increase in the same period. Despite Swiggy’s progress, Zomato remains 81% larger in quick commerce GOV.

Motilal Oswal emphasized the stable duopoly between the two companies, noting Swiggy’s strong footing in food delivery. UBS recently initiated coverage on Swiggy with a ‘buy’ rating, citing narrowing margins and improving scale in the online food delivery sector. Swiggy expects to achieve positive core earnings by December 2025, driven by the rapid expansion of Instamart.

Zomato Soars to New Heights: Record High  Zomato’s shares reached a new record high on December 5, crossing the ₹300 mark for the first time. The stock opened at ₹288.10 and surged by over 5%, peaking at ₹304.50. Bernstein upgraded Zomato to an ‘outperform’ rating, with a target price of ₹335, signaling a 20% upside. The brokerage noted that Zomato has a broader city presence compared to Swiggy, although Swiggy boasts a higher frequency of users. Zomato also leads in gross order value per restaurant.

By the session’s end, Zomato’s market capitalization rose to ₹2.85 lakh crore, with 34.25 lakh shares traded, amounting to ₹101.25 crore in turnover. The stock has performed exceptionally, gaining 353% over two years and 154% over the past year, while showing low volatility with a beta of 0.7.

CLSA also maintains an ‘outperform’ stance, increasing its target price to ₹370 per share, citing strong growth prospects. CLSA compared the earnings of both platforms, highlighting that while Swiggy’s Q2 results showed a 30% YoY rise in B2C gross order value (GOV), Zomato’s GOV grew 21% in food delivery, surpassing Swiggy’s 15% increase. Zomato’s Blinkit, in particular, led the quick commerce segment with a 122% GOV increase, outperforming Swiggy’s 76%.

Morgan Stanley also has an ‘overweight’ rating on Zomato, raising its price target to ₹355 from ₹288, with expectations of Zomato maintaining its market share despite rising competition. They project that Zomato will achieve adjusted EBITDA breakeven in the next 2-4 quarters, with profitability expected by FY2027.

Technical analysis by Anand Rathi suggested that Zomato’s stock is encountering resistance around the ₹284-298 range. The stock has struggled to sustain levels above this zone, which could signal a potential pullback, advising caution and profit booking for traders and investors.

Zomato Soars to New Heights: Record High  Zomato’s shares reached an all-time high of ₹299.25 on December 5, 2024, marking a 4.5% rally. At 10:08 AM, the stock was trading at ₹296.25, up 3.48%. The company’s impressive performance comes after it raised ₹8,500 crore by selling equity shares to qualified institutional investors, a move aimed at strengthening its balance sheet and supporting growth. Zomato’s QIP, launched on November 25, involved the allotment of 33.65 crore shares at ₹252.62 each, a 5% discount from the floor price of ₹265.91.

In its Q2 FY25 results, Zomato reported a net profit of ₹176 crore, up from ₹36 crore in the same quarter the previous year. Revenue for the quarter reached ₹4,799 crore, compared to ₹2,848 crore in Q2 FY24. However, the company noted that its results were not directly comparable due to the acquisition of Orbgen Technologies and Wasteland Entertainment in August 2024.

Zomato’s stock has delivered an exceptional 154% return in the last 12 months and 138% so far in 2024. Additionally, the company is set to join the SENSEX index on December 23, a significant milestone for the firm.