UBS remains bullish on Zomato, sends food delivery stock soaring to all-time high; target implies Rs 40 further upside

Zomato Share Price News: Zomato shares scaled an all-time high on Monday after foreign brokerage UBS maintained its bullish stance on the food delivery company and raised its target price for the stock by Rs 60 to Rs 320. The Zomato stock gained by as much as Rs 15.5 - or 5.9 per cent - to a record Rs 280 apiece on BSE, and was last seen holding on firmly to the green at Rs 267 apiece. Even at the fresh peak, surpassing an earlier record high of Rs 278.5 apiece reached on August 2, the brokerage's target implies an upside of Rs 40 record high The brokerage's target implies an upside of Rs 40 or 14.3 per cent.

According to UBS, Zomato's gross merchandise value (GMV) exceeded analysts' expectations in the food delivery and Blinkit businesses in the June quarter. GMV is a key metric that determines the total value of sales of goods and services on a platform over a given period of time. It is a common metric used to gauge the performance of e-commerce businesses.

The brokerage also highlighted that the Zomato management's guidance appears to be strong while its valuation stands more attractive than its Indian consumer and retail peers.

UBS values Zomato at an embedded value-to-EBITDA multiple of 35 times its FY27 estimates. 

According to Zee Business research, Zomato subsidiary Blinkit has reached several milestones ahead of the Rakhi festival, reaching sales of 693 Rakhis a minute.

Blinkit also logged a record level of orders per minute chocolate products during this period, according to the research. 

On August 17, Blinkit commenced Rakshabandhan-special international orders in 12 countries including the US, Canada, the Netherlands, and France.

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Earlier, Morgan Stanley maintained its 'overweight' rating on Zomato and raised its target price for the stock to Rs 278 from Rs 235. 

Zomato Q1 FY25 Results

Zomato registered revenue of Rs 4,206 crore for the quarter ended June 30 as against Rs 3,562 crore for the previous three months. 

Its net profit increased 44.6 per cent sequentially to Rs 253 crore for the first quarter of the current financial year, according to a regulatory filing. 

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