Zomato Shares Make A Stellar Debut, Market Cap Crosses 1 Lakh Crore

Latest Update- 31/12/2022

A day after getting more orders and reducing its losses for the June quarter, Zomato, an online food delivery service, has seen a nearly 20 percent growth in shares and had its best day on Tuesday.

The stock, which fell by over 60% from its debut price a year ago, recovered from record lows last week and increased 19.96% to close at 55.60 on the BSE, which is its upper circuit limit.

On the BSE, the company's value increased by 7,283.52 crores to 43,777.52 crores. It gained 19.97% to 55.55 on the NSE. 803.27 lakh shares were traded on the BSE and over 52.88 crore shares were traded on the NSE throughout the day, according to trading volume.

Zomato reported on Monday that greater sales caused its consolidated net loss for the first three months of this fiscal year to nearly half to 186 crore.

The Gurugram-based business, which has operations in over 1,000 Indian towns and cities, reported a quarterly loss of 1.86 billion rupees ($23.67 million) on Monday, down from a loss of 3.56 billion rupees the previous year.

In the three months that ended June 30, operating revenue, mostly from its primary food delivery service and associated fees it charges restaurants for using its platform, increased 67 percent to 14.14 billion rupees.

The company reported that its adjusted EBITDA for the food delivery unit broke even for the quarter while gross order value, or the total value of all food delivery purchases made on Zomato's platform, rose by 41.6 percent.

Despite the difficulties, including slower growth than in the previous two years and significant investments in Quick Commerce, where profitability is not in sight in the near future, Morgan Stanley analysts said they liked Zomato for its long runway for growth, steady market share gains, and fast pivot to profitability.

Last Updated- 31/7/2021

How a company performs in the stock market plays a huge role in how it will be received in the market. After all, business is a lot about reputation. And nothing screams good reputation than a higher share price. For Zomate, a lot was at stake when it announced its share in the BSE and the NSE. If the company performed poorly, it would’ve left a huge dent in the supposed future that the company is planning for itself. The surge in Zomato’s share prices reflects that investors, both long-term and short-term, are confident about investing in Zomato. This is great news for the home-grown food platform as it will only make their future brighter. This will also push Zomato ahead of its competitors such as Swiggy and Uber Eats, among many others. 

Zomato said that it will utilize the net proceeds on a couple of things; such as organic and inorganic growth and other purposes. With such a higher surge in share price, it is safe to assume Zomato will likely attract many other investors. The Indian startup scene hasn’t seen big international investments for quite some time and thus Zomato’s performance in the stock market will surely give international investors confidence to invest in the Indian market.