Zomato, the food delivery giant, has reached a new milestone, with its stock price hitting a record high of ₹299.25 on December 5, 2024. This remarkable performance reflects the company’s robust financial growth, strategic initiatives, and increasing market dominance. Here’s an in-depth look at what’s driving Zomato’s stock price and what it means for investors.
Zomato Stock Price: 2024 Performance
The stock price surged 4.5% on December 5 to hit ₹299.25, an all-time high.
Year-to-date, Zomato has delivered a staggering 138% return to investors.
The company’s strong financial performance and strategic moves, including its Qualified Institutional Placement (QIP), have contributed significantly to this rally.
Zomato Joins SENSEX: A Historic Achievement
Zomato will officially join the SENSEX index on December 23, 2024, marking a significant milestone.
The inclusion in the prestigious 30-stock index boosts its visibility among institutional and retail investors.
This reflects Zomato’s growing importance in India’s stock market and its strong performance over the past year.
Q2 FY25 Results: A Snapshot of Growth
Zomato’s Q2 FY25 financial results highlight its improving profitability and expanding operations:
Net Profit: ₹176 crore, up from ₹36 crore in the same period last year.
Revenue from Operations: ₹4,799 crore, a 68% YoY increase.
Total Expenses: ₹4,783 crore, up from ₹3,039 crore YoY, driven by acquisitions and operational growth.
The company’s acquisitions of Orbgen Technologies (movie ticketing) and Wasteland Entertainment (events) from Paytm in August 2024 contributed to this revenue surge, diversifying its business portfolio.
Qualified Institutional Placement (QIP): A Strategic Fundraise
To fund its growth objectives, Zomato raised ₹8,500 crore through a QIP:
33.65 crore shares were allotted to institutional investors at ₹252.62 per share, a 5% discount from the floor price of ₹265.91.
This move strengthens Zomato’s balance sheet and prepares it for further expansion in existing and new markets.
Swiggy vs. Zomato: The Battle for Market Dominance
The rivalry between Zomato and Swiggy continues to shape India’s food delivery landscape.
While Zomato’s profits and revenue are soaring, Swiggy remains a formidable competitor.
Innovations like Zomato’s loyalty programs and Swiggy’s focus on quick commerce add unique dimensions to this battle.
The competition is expected to intensify in 2025, making this a space to watch for investors.
Zomato Stock Outlook: Should You Invest?
Zomato’s record-breaking performance makes it a strong contender for long-term investment. However, here are key factors to consider:
Growth Potential: With a strengthened balance sheet and inclusion in the SENSEX, Zomato has the potential to attract more institutional investors.
Competition: Swiggy and other players could pose challenges, requiring Zomato to innovate continually.
Rising Expenses: While revenues are growing, increasing expenses could impact profit margins.
Conclusion
Zomato’s stock price surge, Q2 FY25 results, and entry into the SENSEX highlight its growing dominance in India’s market. While challenges like rising expenses and competition persist, the company’s strong fundamentals and strategic initiatives position it for continued success.
For investors, Zomato offers a compelling growth story, but cautious optimism is advised. With its ambitious plans and increasing market. influence, Zomato remains a stock to watch in 2025.
