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Zomato Ltd operating in the food delivery market of India has shown great performance in 2024. Its stock has a YTD return of 144.38%. On December 6th 2024, Zomato closed at ₹303, up 1.17% from the previous session.
They also demonstrate a clear bullish trend regarding the company which in turn makes it very popular among investors.
Zomato’s trading began at ₹288.1, rose to a high of ₹304.5 during the day, and finished at ₹303 on December 6. Currently, the stock is hovering near its 52 week high of ₹304.65, which is significantly higher than the 52 week low price of ₹114.25 suggesting high possibility of growth. Zomato has a market capitalization of ₹2.886 trillion and is gradually transforming into a major player on the NSE.
The company has provided a fantastic 1-year return of 158.93% over the year which is much higher than the return provided by S&P BSE SENSEX Index that gave 17.94% return. Clearly, valuation and the consistent long-term growth plan evident in its 5-year return of 160.60% uphold this point.
The daily chart shows that the stock price of Zomato has risen and shows good demand at ₹240 and ₹280 levels. The breakout above ₹300 has reinforced the bullish scenario with the RSI already at overbought area, currently at 70.49.
Pay attention to possible consolidation over the ₹300 - ₹305 mark. However, the stock has been pushed to this level and it may sustain and cause another rally to shoot up. The next resistance is seen at ₹320 while the lows present a strong support to the stock’s downside.
Zomato’s Gross Profit Margin stands at 4.68% & Return on Equity (ROE) ratio is 3.62%, which proves that it can earn profits from its equity capital. But with a return on assets (ROA) of -0.15% and a levered free cash flow of -₹10.02 billion suggest room for improvement in operational efficiency.
For the trailing twelve months (TTM), Zomato recorded revenue of ₹158.55 billion and net income attributable to common equity of ₹7.42 billion, supported by a diluted earnings per share (EPS) of ₹0.84. These figures represent Zomato’s profitability and uptrend growth trend.
Zomato’s absolute cash in hand is ₹18.81 billions and the total debt to equity is a best-in-class ratio of 5.44%. This makes the leverage level low and therefore helps the company to be ready for any expansion in the future.
Several factors are propelling Zomato's stock upward:
Sector Growth: The food delivery services market in India is fast growing because of increased internet usage, increasing urbanization, & changing customers’ dining habits.
Operational Efficiency: This has been evident from their improved profitability because, with smarter supply chain infrastructure and successful delivery rates, the firm has now increased efficiency.
Investor Confidence: As evidenced by its impressive bookings, the company has strong long term growth prospects that have been embraced by institutional and most retail investors.
Short-term and long-term trends for Zomato are bullish, backed by its volume breakout above key resistance levels. As the case, market participants will have to wait for an update on the revenue growth and profitability to be reported in the February 2025 earnings report.
Zomato’s ability to sustain its bullish momentum will depend on:
Market Expansion: Expansion in the new Tier 2 and Tier 3 cities.
Cost Management: Increasing organisational revenues and strengthening the overall net worth of the organization by minimizing the overall operating expenses.
Innovation: Launching of new services as a way of maintaining market competitiveness.
For now, the stock remains a favorite for those looking to gain a foothold into India’s technology led consumer segment.
