Zomato shares surged over 4%, reaching an all-time high of Rs 284.35 on the Bombay Stock Exchange (BSE) after global brokerage UBS reaffirmed its ‘buy’ rating with an increased target price of Rs 320. The stock’s impressive performance has delivered a 185.86% return over the past year, with market optimism driven by Zomato’s growing business model, particularly in quick commerce and food delivery.
UBS, in its report, pointed to the steady growth of the food delivery industry, noting a 2.5% monthly increase in the sector for August 2024. Zomato, despite ongoing competition from Swiggy, is expected to see its gross merchandise value (GMV) rise by 7% quarter-on-quarter for the second quarter of FY25. This positions Zomato well in a competitive market as it expands operations, especially in major metro cities, following the success of its quick commerce platform in the National Capital Region (NCR).
Other financial institutions, such as JP Morgan, have also raised their target price for Zomato, increasing it to Rs 240 from Rs 208. They maintain an ‘overweight’ rating due to Zomato’s pivotal role in transforming retail consumer behavior. According to BSE analytics, Zomato shares have given significant returns, rising by 351.52% in the last two years, further solidifying investor confidence in the company’s long-term growth potential.
This rally highlights Zomato’s strong position in India’s evolving digital economy, with its innovative service offerings continuing to attract both customers and investors alike.
