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Zomato Rally Continues, Shares Zoomed 7% over Bulk Order

Zomato shares rose for the third day in a row following a big block sale of 1.5 lakh shares.

Zomato shares rose for the third day following a big block sale in which 1.5 lakh shares, or 0.2% of equity, worth Rs 88.2 crore, changed hands at an average price of Rs 59 per share.

The stock closed 6.26% higher at Rs 64.50 per share in today’s transaction. It increased by 25.85% in the previous month but declined by 10% last year. Zomato’s market value is now Rs 54,102 crore as a result.

According to Trendlyne data, Zomato shares have an average broker target of Rs 65, representing a 0.15% upside from current market levels.

Analysts that have initiated coverage on the stock forecast significant growth to be complimented by the firm’s profitability in FY25, despite the increased competition intensity.

With Amazon’s departure, the food delivery market is now dominated by Zomato (55% market share) and Swiggy (45%). Given the significant capital required to displace the incumbents, the market has a very high moat.

Zomato is predicted to generate a robust 29% revenue CAGR between FY23 and FY25, owing to increasing penetration, a higher proportion of transactional customers, and increased ordering frequency.

Despite Zomato Gold’s activation, food delivery Gross Order Value (GOV) will remain flat sequentially in Q4FY23E (+14.2% YoY). Due to post-Diwali consumption fatigue and the online-to-offline shift, GOV growth was slow.

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