Zomato Ltd has emerged as a standout player, capturing the attention of investors with its remarkable performance. Established in 2010, the online food service platform has become a force to be reckoned with, boasting a market capitalisation of approximately ₹1,12,022 crore. What’s truly noteworthy is the astounding growth of Zomato shares, delivering over 150% returns in less than a year. With robust financials backing this surge, could Zomato be the hidden gem your investment portfolio needs? Let’s delve into the details.
A Look at the Daily Chart
Zomato’s stock has been on an impressive uptrend, charting higher highs and higher lows.
Starting at ₹48.2 per share in February, the stock has now soared above ₹125 per share, delivering remarkable returns to investors. A closer look at the price action reveals a significant breakthrough as the stock recently crossed a crucial resistance level of ₹125 with a bullish candle. If the price sustains or consolidates at these levels, further upward movements may be on the horizon. Additionally, the trending Exponential Moving Averages (EMAs) paint a positive picture for the stock’s future trajectory.
Second Quarter Results FY2023-24
The financial health of Zomato is another feather in its cap. In the second quarter of the fiscal year 2023-24, the company reported a net profit of ₹36 crore, a remarkable turnaround from the net loss of ₹251 crore in the same period the previous year. The revenue from operations witnessed a robust growth of 72%, reaching ₹2,848 crore compared to ₹1,661 crore in the corresponding period. The Gross Order Value (GOV) also climbed 47% year-on-year to ₹11,422 crore, showcasing the resilience and growth potential of Zomato’s business model.
In a communication to shareholders, Zomato shared that its quick-commerce business, Blinkit, turned contribution positive for the entire quarter, marking a significant milestone. Founder and CEO Deepinder Goyal expressed satisfaction with the company’s performance, noting a consecutive profitable quarter with Adjusted EBITDA of ₹41 crore.
Shareholder Symphony
One of the key indicators of a company’s growth potential is the confidence it instills in investors. Zomato’s shareholding pattern reveals a compelling story. Foreign Institutional Investors (FIIs) have significantly increased their stake in the company, jumping from 10.27% in September 2021 to an impressive 54.72% in September 2023. Domestic Institutional Investors (DIIs) are also bullish on Zomato, increasing their shareholding from 4.73% to 13.04% during the same period.
Notably, the company’s debt-free status adds another layer of confidence for investors. The strong fundamentals coupled with growing investor trust position Zomato as a standout performer in the competitive market.
While past performance is not a guarantee of future returns, the current ingredients suggest Zomato might be a dish worth adding to your investment portfolio. However, remember to conduct your own thorough research and consider market conditions before making any investment decisions. The stock market can be unpredictable, and even the tastiest meals can sometimes leave a bad taste in your mouth.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
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