Zomato Ltd is all set to replace JSW Steel as Sensex constituent on Monday, December 23. The index rejig was scheduled for Friday, December 20. The inclusion is likely to result in over $500 million in passive inflows for Zomato and over $250 million in outflows for JSW Steel. Mahindra & Mahindra Ltd, ITC Ltd, Infosys Ltd and Sun Pharma are among Sensex stocks, which may see marginal passive outflows due to reduction in their weightages in the 30-pack index, Nuvama Institutional Equities suggested.
Zomato is projected to see buying of 15.1 crore shares worth $513 million, which is 2.6 times its average volumes. The excluding stock JSW Steel may see selling of 2.1 crore shares on index rejig worth $252 million. M&M may see $77 million outflows. Infosys ($16 million), ITC ($9 million) and Sun Pharma ($4 million) may see marginal selling.
Ahead of its Sensex entry, the Zomato stock was trading 0.82 per cent lower at Rs 289.50 on Thursday. The stock has delivered 132.57 per cent return in 2024 so far against 9.78 per cent rise in the BSE Sensex.
JM Financial has retained its 'Buy' rating on Zomato. It noted that Zomato-owned Blinkit’s recent launch of ‘Bistro’, a 10-minute food delivery app, was a low-key affair.
But its recent checks suggest the platform has opened up a wide range of use cases that were hitherto not getting adequately addressed through Zomato’s own food delivery app. For example, the Bistro app offers a wide range of convenience food at relatively affordable price points through self-operated kitchens, akin to the ubiquitous canteen service.
"In fact, Bistro's within-10 minutes-delivery proposition should help the company better penetrate breakfast and evening snacks meal consumption in high density micro markets in Tier 1 cities, while also improving the visibility for its value meals (Zomato Everyday) proposition," it said.
JM said Bistro’s selection and price points suggests it will likely compete with Zepto Café rather than Swiggy’s Bolt or Zomato’s own 15-min food delivery offering, thereby reducing chances of conflict of interest claims by third-party restaurant partners.
"While we await more details before baking in the impact of Bistro’s launch in our model, this could help Zomato better penetrate the small ticket food consumption space in India," the brokerage said.