Zomato's stock continues its impressive run, surging by 5% in Wednesday's intra-day trade to reach a new high of ₹ 281.40 on the BSE. This milestone reflects the growing confidence in the company's future earnings as investors flock to buy shares online. With the stock surpassing its previous high of ₹ 280 on August 19, Zomato's performance has been one of the standout stories of the year in the Indian market.
The market price of Zomato's stock has more than doubled in 2024, soaring by an impressive 127% compared to the 13.4% rise in the BSE Sensex. This surge in stock price demonstrates Zomato's ability to attract investors seeking to buy shares online, thanks to the company's promising growth trajectory. Zomato has set itself apart from competitors by delivering consistent value, which is reflected in its outstanding stock performance this year.
A key driver behind Zomato's stock price surge is the company's optimistic earnings forecast. The management has projected 20-25% year-on-year growth in gross order value (GOV) in its food segment over the next five years. The company also plans to double its quick commerce outlets after FY25, with expectations that this could lead to an annual growth rate, i.e. CAGR of over 70% in FY25-27E. These ambitious plans give investors further reason to buy shares online, with a positive outlook for the company's medium-term performance.
Beyond the food delivery sector, Zomato's other ventures, such as Hyperpure and the Going Out division, have experienced robust growth. Revenues from these segments have surged 96.4% and 105.8% year-on-year, respectively. The management remains confident that Zomato's going-out business will continue to see strong demand, contributing to a broader growth in lifestyle consumption. This diversification reinforces the company's position in the market, making it an attractive option for those looking to buy shares online.
In terms of profitability, Zomato's management is cautiously optimistic. While the going-out segment is expected to remain near break-even on an adjusted EBITDA basis, the company is committed to scaling operations and improving profitability. The quick commerce segment, led by Blinkit, is more experience-driven than discount-based, which sets it apart from other players in the industry. This strategic focus on customer experience rather than price competition is expected to help Blinkit grow, even in non-metro areas. With these insights, investors remain keen to buy shares online, anticipating further growth in this segment.
Analysts are optimistic about Zomato's future prospects, noting that the company's food delivery business is currently trading at 60 times its FY26E EBITDA. While this may limit the short-term potential for price appreciation, the long-term outlook is positive, with a forecasted EBITDA CAGR of 52.2% for FY25E-27E. Brokerage firms have maintained a 'Buy' rating on Zomato's stock, with a target price of ₹ 320 per share. Blinkit, the quick commerce arm, is also predicted to be a significant driver of growth in earnings in the medium term, further encouraging investors to buy shares online.
Zomato's record-breaking performance in 2024 has not gone unnoticed by investors. With strong growth across its core food delivery business and other segments, as well as a clear focus on scaling its operations, the company is well-positioned for future success. For those looking to buy shares online, Zomato offers a compelling opportunity driven by a strong earnings outlook, innovative business strategies, and continued expansion plans. As analysts continue to endorse the company with high target prices, Zomato remains a key player in the Indian stock market, making it an attractive option for investors.
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