Shares of online food delivery firm Zomato Ltd have surged 235% from their 52 week low hit last year. Zomato stock, which fell to a yearly low of Rs 49 on March 28, 2023 touched a high of Rs 164.45 in the current session on BSE. However, the stock has lost 6% in the last two weeks.
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The stock is trading neither in the overbought nor in the oversold zone as the relative strength index (RSI) of Zomato stock stands at 54.7. Zomato shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.
It has seen very less volatility in the last one year with a beta of 0.3. The stock has a high price to book ratio of 8.36. It has a PE ratio of 122.
The stock has a book value per share of 19.14.
Zomato shares hit an intraday high of Rs 164.45 on BSE on Monday. Zomato stock opened higher at Rs 162.35. In a year, the Zomato stock has risen 191% and climbed 28.41% in 2024.
A total of 8.42 lakh shares of Zomato changed hands amounting to a turnover of Rs 13.55 crore on BSE. The market cap of the firm rose to Rs 1.40 lakh crore on Monday.
Global brokerage UBS sees an upside of 22% compared to the close in the previous session. It has assigned a target price of Rs 195 on the Zomato stock.
UBS said, “Based on the data for January and February, and assuming similar trends play out in March as in the previous year (plus 2 percent MoM in March 2023), the data suggests a low to mid-single digit QoQ GMV decline in Q4FY24,” the brokerage said.
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Estimates of GMV growth for Q4 could be lowered, UBS sees on-year growth to remain healthy and within management’s guidance of 20 percent or more.
Foreign brokerage firm HSBC too has a bullish stance on the stock. It has raised its target price to Rs 200 on Zomato shares as it believes digital spends in India is likely to increase.
HSBC has assigned a Buy call on Zomato backed by continued market share gains in food delivery and further upside potential from quick commerce. It raised its target price to Rs 200 per share from Rs 163 earlier.
Brokerage CLSA assigned a target of Rs 227 to the stock post Q3 earnigs.
“For our relative valuation, we move to a PE-based multiple of 40.6x (30% discount to our QSR multiple of 58x) on FY26 EPS of Rs5.85. We assign a 30% discount to our QSR coverage despite faster growth as Zomato is yet to prove the sustainability of profit over extended periods, and there remains lingering concern over pricing power. We also roll forward our valuation to FY26,” it said.
Zomato reported a profit for the third straight quarter in December 2023.
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The online food delivery provider reported a consolidated net profit of Rs 138 crore in Q3 against a net loss of Rs 347 crore in the December 2022 quarter. Revenue in Q3 grew 69% year-on-year to Rs 3,288 crore compared to Rs 1,948 crore in the December 2022 quarter.
