On Tuesday, July 9, the Zomato share price jumped about 3% to a new all-time high in intraday trading on the BSE. Zomato shares opened at ₹208.65 against its previous closing of ₹207.90 and shortly surged over 3% to achieve a new all-time high of ₹214. If the stock closes higher, it will be up for the third straight session.
Over the last two years, Zomato shares have skyrocketed. The stock has risen from an all-time low of ₹40.55 on July 27, 2022, to a current market price of ₹214. This is an astounding over-fivefold growth, with a 428 percent return from its lowest point.
Can one of India’s biggest online food tech platforms’ stock price increase higher than it is now?
Some experts and financial firms believe the stock still has some traction.
The fundamental views
IIFL Securities, a brokerage firm, has a buy call on the stock with a 12-month target price of ₹230. They believe the stock’s premium valuations will be sustained by continuous growth and solid execution on profitability across the food delivery and rapid commerce areas.
However, the corporation may experience short-term headwinds from increased competition in the rapid commerce market.
“Our 12-month DCF-based target price of ₹230 represents 8.2 times FY26ii (fiscal year 2026 second quarter) enterprise value-to-sales ratio.” According to IIFL Securities, the stock’s revenue CAGR is 33% from FY24-27ii, with a potential profit after tax of almost ₹3,000 crore by FY27ii.
JM Financial has a buy call on the stock, with a target price of ₹230.
Our reduced target price for Zomato is ₹230, down from ₹250 before. This is based on a 75-times multiple of the company’s September 26 EPS (earnings per share). Despite the change, the stock remains one of our top recommendations in the publicly traded Internet industry. We believe it is well-positioned to capitalize on strong industry tailwinds for hyperlocal delivery companies. According to JM Financial, the company’s balance sheet remained robust, with net cash of ₹12,200 crore as of March 24 (₹12,000 crore on December 23).
Several global brokerage firms, including CLSA and Goldman Sachs, voiced optimism about the stock in June reports.
According to CLSA, Zomato is surpassing its rival Swiggy in growth measures, while Goldman Sachs notes that the firm leads its rivals in profitability, positioning it to either expand market share, increase profitability more, or accomplish a mix of both goals in the future.
CLSA recommends buying the stock, with a 12-month target price of ₹248. Goldman Sachs recommends buying the stock with a target of ₹240.
Technical points of view
According to technical experts, the stock might potentially hit ₹250 in the near to medium future.
Avdhut Bagkar, derivatives and technical analyst at StoxBox, believes the stock will continue to rise till it reaches the ₹200 support level on a closing basis. Technical charts indicate a target price of ₹250 in the short-medium term. The stock has yet to hit the Relative Strength Index (RSI) overbought zone, signaling that there is still room for additional advance.
Mandar Bhojane, an equities research analyst at Choice Broking, said that the stock just broke out of a daily range and experienced a considerable rise in trading volume, indicating a probable breakout.
Bhojane feels that if the price closes above ₹214, it can potentially hit short-term targets of ₹250 and ₹260. Immediate support levels at ₹200 provide opportunities for buying on dips.
Based on technical analysis and current market conditions, Zomato appears to be an interesting purchasing opportunity for investors aiming for a ₹250 to ₹260 price goal, provided suitable risk management measures are in place. The Relative Strength Index (RSI) is currently at 69 and heading upward, indicating increased purchasing activity. Consider setting a stop loss at ₹190.
Read Also: Zomato stock falls 5% as Macquarie anticipates nearly a 50% downside due to tough competition
