Zomato share price surged to a new high, doubled from IPO price

Zomato share price increased by almost 6 per cent today, rising to a new record high of Rs 147.85. The stock price of an online food delivery platform is now around 96 per cent higher than before its IPO price of Rs 77 per share. Swiss brokerage UBS Securities said in a report that Zomato share price is possible to surge by 13 per cent more from these levels. After a 12-month target price of Rs 166 per share, UBS Securities decided to initiate in the stock a buy rating. UBS Securities said that they expect Zomato to deliver more than 45 per cent revenue CAGR as it represents one of the leading players in the food delivery market in India. They added that it would make the company one of the fastest-growing companies in the region.

Last week, Zomato stock placed itself at Rs 115 apiece; since then, it surged by 28.55 per cent.

Overview

56.95 lakh shares changed hands on BSE in traded volume cycles, while 8.15 crore units have traded on NSE. In its report, UBS highlighted that online food delivery boosted globally last year. Factors were smaller families, lesser willingness and time to cook. It provided long-term growth for the online food market in India.

Unit economics are in the process of evolving. Dotpe will also experience an increase, while a fragmented eco-system will enable aggregator platforms to take the lion’s traffic share.

It added that even as valuations do not appear cheap at FY24e EV sales, superior growth gives room for the uprising. India has 50-70 million total online orderers and 10 million active users. UBS still believes that India has a long way to grow.

In 2020, the UBS Evidence Lab survey showed that around 81 per cent of people who had not ordered through online platforms are likely to do order in the future.