Shares of Zomato surged as much as 7.27% to reach INR 261.75 during the intraday trading session on the BSE today (January 16) as Hong Kong-based brokerage CLSA reaffirmed its ‘outperform’ rating for the foodtech major.

However, the shares shed gains later, trading 1.17% higher at INR 246.8 at 11:33 AM. The company’s market capitalisation stood at INR 2.38 Lakh Cr at the time above, with as many as 3.54 Cr shares having changed hands by then.

The brokerage firm added Zomato’s stock to its ‘high conviction’ list, giving a target price of INR 400 per share. This price target marks an upside potential of 64% from the previous close price.

While the stock has given a return of above 85% over the last year at the current market price value, it underwent a correction of around 17% in the last month.

The brokerage firm viewed this decline as a buying opportunity, particularly as the quick commerce sector is anticipated to grow significantly, with a projected 51% revenue CAGR from FY24 to FY27.

It further pointed out that although margins may soften in the short term due to expansion efforts, the company’s overall profit pool is expected to expand substantially over the next three years.

Recently, Zomato launched its 10-minute food delivery service Bistro. Its counterpart Swiggy too rolled out a new app, ‘SNACC’ offering the same food delivery service.

(The story will be updated soon)

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