Zomato shares cross Rs 300 mark for first time, trading at record high; price targets, outlook and more

Shares of Zomato hit a record high on Thursday after brokerage Bernstein assigned an outperform  stance on the online food delivery firm. The brokerage sees a 20% upside to the stock with a target price of Rs 335. Bernstein said Zomato has a wider city presence compared to Swiggy. Swiggy has higher frequency of users. Gross order value per restaurant is higher for Zomato, said the brokerage. 

Zomato shares opened higher at Rs 288.10 against the previous close of Rs 286.30. The stock surged over 5% intra day to a record of Rs 304.50. The stock crossed the Rs 300 mark for the first time ever in today's session. A total of 34.25 lakh shares of Zomato changed hands amounting to a turnover of Rs 101.25 crore on BSE. The market cap of the firm rose to Rs 2.85 lakh crore on Thursday. 

The stock of the online food delivery firm is bullish in the short as well as long term as the scrip is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages. 

The multibagger stock has gained 353% in two years and risen 154.35% in a year.

It has seen very less volatility in the last one year with a beta of 0.7. 

Another brokerage CLSA has maintained its outperform stance on the stock and raised its price target to Rs 370 per share, citing robust levers for growth.

CLSA compared Swiggy's earnings with Zomato's results while maintaining its bullish stance on the stock. 

"Swiggy's Q2 results showed a 30 percent year-on-year increase in overall B2C gross order value (GOV), compared to a 23 percent rise in Q1 FY25. In the quick commerce segment, Swiggy's GOV grew 76 percent YoY, trailing Zomato's Blinkit, which reported a 122 percent increase," CLSA said.

The brokerage added that in food delivery, Swiggy's GOV rose 15 percent YoY, while Zomato outpaced it with a 21 percent increase. Both platforms saw similar sequential improvements, with Swiggy at 6 percent and Zomato at 5 percent. 

CLSA notes that while the gap between Swiggy and Zomato has stopped widening, Zomato remains 81 percent larger in quick commerce GOV.

Another global brokerage Morgan Stanley has an 'overweight' stance on Zomato with a revised price target of Rs 355 from an earlier value of Rs 288 per share.

The global brokerage expects the online food-and quick-commerce aggregator to maintain its near 40 per cent market share in spite of a rise in competition.

"Rising share of quick commerce in India's retail market, strong execution in food delivery/quick commerce, deep balance sheet and large profit pool by 2030 keep us 'Overweight'. We build in adjusted EBITDA breakeven for the next two to four quarters, implying substantial investments in aggressive expansion. We assume margins of 2.2 per cent by F2027 and 5.1 per cent by F2031, implying an annual profit pool of close to $1 billion for this business. We believe the market has assigned a value of Rs 120 per share to Blinkit (vs our PT implied value of Rs 212/share). We see downside support at Rs 160 (-35 per cent from CMP) with potential upside of 37 per cent to our price target," said Morgan Stanley.

Jigar S Patel, Technical Research Analyst at Anand Rathi Shares and Stock Brokers said, "Zomato encountered resistance around the Rs 284 level, which aligns with its previous top. This level has historically acted as a barrier, as seen on the daily chart, where the stock has formed multiple tops. Each time Zomato approached the Rs 284-298 zone, selling pressure emerged, leading to a reversal or consolidation. This repeated inability to sustain above this resistance zone indicates that market participants view it as a strong supply area. Given these factors, we advise a cautious approach for traders and investors. Profit booking is recommended in this range as the stock shows signs of potential top formation, increasing the likelihood of a pullback."