Zomato rises after Bernstein double-upgrades stock, lifts target by 10%

Zomato share price today, Zomato share price target, Zomato pure veg fleet: Zomato shares gained on Wednesday, March 20, a day after the food delivery app announced the introduction of a 'pure veg' mode in select markets in phases. Giving a thumbs up to the announcement, foreign brokerage Bernstein maintained its 'outperform' rating for the stock while raising its target price by 10 per cent to Rs 200 per share.

Zomato shares gained as much as 5.53 per cent to Rs 166.7 on NSE, halting a two-day fall. The counter closed five per cent or Rs 7.9 at Rs 165.85 on NSE. 

Bernstein's target implies an upside of 26.4 per cent in Zomato shares from the previous close. 

Zomato pure veg fleet, Zomato pure veg mode

After market hours on Tuesday, Zomato announced the launch of a 'pure veg' mode, wherein customer orders from vegetarian-only restaurants would be delivered by a separate fleet, in select markets.

"To solve for their dietary preferences, we are today, launching a 'Pure Veg Mode' along with a 'Pure Veg Fleet' on Zomato, for customers who have a 100 per cent vegetarian dietary preference," Zomato co-founder and CEO Deepinder Goyal posted on microblogging site X (formerly Twitter).

I have received an overwhelmingly positive response on this launch from so many people. A lot of comments from young people who eat non-veg food saying “now my parents can also use zomato”.

I would like to repeat that this feature strictly serves a dietary preference. And I know…

— Deepinder Goyal (@deepigoyal) March 19, 2024

India has the largest percentage of vegetarians in the world and one of the most important pieces of feedback they have gotten from their customers is that they are very particular about how their food is cooked and handled, he wrote. 

"Pure Veg Mode will consist of a curation of restaurants that serve only pure vegetarian food, and will exclude all restaurants which serve any non-veg food item. Our dedicated Pure Veg Fleet will only serve orders from these pure veg restaurants. This means that a non-veg meal, or even a veg meal served by a non-veg restaurant, will never go inside the green delivery box meant for our Pure Veg Fleet," Goyal added. Read more 

Zomato share price target: Should you buy, sell or hold Zomato shares? Bernstein maintains 'outperform' call

Bernstein raised its target price for Zomato to Rs 200 from Rs 180 per share.  

Earlier, UBS maintained its buy call on the food services major with a target of Rs 195, implying a potential upside of 22 per cent. UBS sees some downside to consensus estimates (+1 per cent QoQ) and expects year-on-year growth to remain healthy and within management's guidance of 20 per cent+ YoY.

Zomato share price history

The Zomato stock has rewarded investors with a nearly 200 per cent return in the past year, sharply outperforming a nearly 28 per cent rally in the headline Nifty50 index.

Zomato shares have grown by one fourth so far in 2024, and nearly 60 per cent in six months.

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