Zomato’s Recent Stock Performance
Zomato shares have been making waves in the stock market, recently hitting a record high of ₹286.50 on September 13 before cooling off by almost 3% from its peak during intraday trading. Despite this dip, global brokerage firms remain optimistic, projecting significant upside potential for the stock.
Bernstein, a renowned global brokerage firm, has reaffirmed its “Outperform” rating for Zomato, raising its target price to ₹330 from an earlier ₹275. This revision suggests a potential upside of over 16% from the closing price on September 12. UBS has also given Zomato a “Buy” rating, setting a target price of ₹320, further reinforcing positive sentiment around the stock.
Analysts’ Perspective on Zomato’s Strategy and Market Position
Bernstein has expressed confidence in Zomato’s long-term growth strategy, which prioritizes market leadership over immediate profitability. The firm has updated its estimates for Blinkit, Zomato’s quick commerce arm, which it sees as a crucial player in the emerging quick commerce sector. The brokerage house believes that Zomato is well-positioned at the center of this convenience-focused market, with strong growth prospects in both metropolitan and non-metro areas.
Meanwhile, UBS’s recent report noted that Zomato’s order growth of 1.8% on a month-on-month basis in August lagged behind Swiggy’s 3.1%. However, when comparing growth from December 2023 to August 2024, Zomato achieved a 25% increase, outperforming Swiggy’s 18% growth. Elara Securities India also highlighted the potential for quick commerce to scale in non-metro areas, which could bolster growth for companies like Zomato’s Blinkit in the medium to long term.
Technical Analysis and Forecasts
From a technical standpoint, Zomato has shown a breakout above the consolidation range of ₹280 to ₹249, marked by a decisive bullish candle on the weekly chart, indicating the continuation of a medium-term uptrend. Axis Securities emphasized that the stock maintains a pattern of higher high-low formations on a weekly chart, suggesting sustained upward momentum.
According to Axis Securities, Zomato’s stock price remains above the 23% Fibonacci retracement level from the rally between ₹146 and ₹279, with support forming around ₹249. The weekly Relative Strength Index (RSI) has crossed above its reference line, generating a buy signal. Axis Securities recommends buying Zomato shares within the range of ₹278 to ₹272, with a target price of ₹314 to ₹325, expecting gains of 14% to 18%.
Market Performance and Future Outlook
As of 11:25 am on September 13, Zomato shares were trading 2.11% lower at ₹277.90 on the BSE, and 2% lower at ₹278.40 on the NSE. Year-to-date, Zomato shares have given a return of 124%, compared to the Nifty 50 index’s 17% gain over the same period. In the past three months, Zomato’s stock has surged more than 50%, reflecting strong investor interest and confidence in its future prospects.
Overall, analysts remain bullish on Zomato, citing its focus on long-term market leadership, growth in the quick commerce sector, and positive technical indicators as reasons for continued optimism. With target prices ranging from ₹314 to ₹330, the outlook for Zomato shares remains robust, despite short-term fluctuations.