For the second consecutive day, Zomato’s stock increased, hitting a record high of ₹304.50 on December 5, marking a significant turning point for the foodtech behemoth. The stock rose more than 6% during intraday trading, helped by a robust trade volume of 5.84 million shares valued at ₹1,770.06 crore across the BSE and NSE.
Zomato’s market valuation has risen to an incredible ₹2.92 lakh crore, or around $34.5 billion, as a result of this surge, underscoring its dominance in India’s fast commerce and food delivery industries. This year, the stock has risen 142%, much outpacing the BSE Sensex, which increased by slightly more than 11% during the same period.
The Numbers Behind the Momentum
The surge was driven by significant institutional and retail participation, not merely sentiment. Zomato has been a favorite among investors with nine positive closes in the last 13 trading sessions. The company’s excellent market position and capacity to capitalize on its large user base for profitable expansion are credited by analysts with this momentum.
With a dominant 58% market share in the meal delivery industry, Zomato’s success in Q1 FY25 further boosted investor confidence. With a 46% market share, its rapid commerce division, Blinkit, outperformed Zepto (29%) and Swiggy Instamart (25%).
Analysts See Further Growth Potential
Global brokerage Morgan Stanley has revised its price target for Zomato to ₹355 per share from ₹278 earlier, reaffirming its “overweight” stance. The firm believes Zomato’s stock could potentially double within the next three to five years—or even less under a bullish scenario.
The optimism stems from Zomato’s strategic execution across key verticals, including food delivery and quick commerce, as well as its solid balance sheet and long-term profitability prospects. Morgan Stanley highlights Zomato’s significant lead in quick commerce and its “District” vertical (focused on dining-out experiences) as drivers of future growth.
Zomato has also taken steps to strengthen its position, raising ₹8,500 crore ($1 billion) through a qualified institutional placement (QIP) earlier this year. The funds are being used to scale operations in food delivery, enhance its quick commerce vertical, and invest in other high-growth areas.
The Competitive Landscape: Swiggy, Zepto, and Others
Despite its current dominance, Zomato faces stiff competition from key players like Swiggy and Zepto. Swiggy recently raised $1.35 billion through its IPO, while Zepto secured over $1 billion in venture capital funding this year. Both competitors are leveraging their capital to gain ground in food delivery and quick commerce.
The rapid delivery market has also attracted heavyweights like Flipkart, Tata-owned BigBasket, and Reliance Retail, further intensifying the battle for market share. However, Zomato’s established presence, strong execution, and innovative strategies give it a clear edge.
What Lies Ahead for Zomato?
Zomato’s ability to sustain its lead will depend on how it navigates the competitive landscape. The company’s focus on profitability, combined with strategic investments in technology and infrastructure, positions it well for future growth. Analysts expect Zomato to generate significant profits by 2030, a target that resonates with investors seeking long-term value.
Additionally, Zomato’s foray into the going-out segment, under its “District” vertical, adds a new dimension to its business model. By tapping into dining-out trends and experiences, the company is diversifying its revenue streams while staying connected to its core food delivery business.
A Bright Future for Investors
In 2024, Zomato’s stock has performed exceptionally well, giving investors outstanding gains. The company is still a major player to keep an eye on in India’s rapidly changing foodtech and quick commerce industries as it keeps growing its customer base and innovating its products.
Given that market dynamics are shifting in Zomato’s favor and analysts remain bullish, the company is well-positioned for a bright future. The company is a good investment on the Indian stock market because of its strong base and potential for growth.
In addition to demonstrating its strong business strategy, Zomato’s recent stock market success also shows that investors have faith in the company’s capacity to take the lead in a fiercely competitive market. The company has the potential to revolutionize the rapid commerce and foodtech sectors in India and abroad if it keeps moving in the same direction.
