As Zomato, the meal delivery aggregator, prepares to replace JSW Steel in the BSE Sensex index, its shares jumped 6.35% in early morning trading on Monday, November 25 to reach their 6-week high of ₹273 each. The business will join the 30-share frontline index as the first modern tech stock.
On Friday after market hours, Asia Index Private Ltd, a BSE subsidiary, declared the reconstitution. The Asia Index stated that the modifications will go into effect on December 23, 2024. Based on their average six-month float-adjusted market capitalization, companies are either added to or removed from the Sensex.
The BSE Sensex is a benchmark and an investable index that consists of 30 sizable, reputable corporations from important industries.
The business also said on Saturday that a plan to raise money through a qualified institutional placement was authorized by its shareholders. To improve its cash balance after the recent acquisition of the movie and event ticketing divisions of digital payments company Paytm, the board last month authorized a fundraising campaign of up to ₹8,500 crore through this means.
With its shares rising 41% over the last six months and more than 128% year-to-date (YTD), Zomato has reported significant stock price gains. Strong demand in its rapid commerce section, Blinkit, and consistent growth in its core food delivery business have been the main drivers of this growth.
The stock’s worth has also increased significantly as a result of multiple brokerages raising their target prices for the company, citing strong potential in the rapid commerce and food delivery industries. Nomura, a Japanese brokerage firm, raised its target price from ₹280 to ₹320 while keeping its “buy” rating, indicating that the company’s growth has a lot of space to accelerate.
Zomato’s quick-commerce company is concentrating on increasing shop density in current markets due to the low penetration levels and growing market acceptance in India. According to Nomura, the corporation intends to grow its shop count by about four times, with a goal of 2,000 outlets by December 2026.
Global brokerage firm JP Morgan maintained its “overweight” rating in September and increased its target price for the company from ₹208 to ₹340 per share.
In terms of its financial performance, the company’s consolidated net profit increased from ₹36 crore in the same quarter of the previous fiscal year to ₹176 crore in Q2FY25. Compared to ₹2,848 crore during the same time last year, consolidated revenue from operations was ₹4,799 crore.
The company’s overall number of stores increased to 791 after adding 152 new “dark stores—distribution” centres during the quarter, the most in any one quarter.
