Business News

Zomato Hits All-Time High, Countering Slow Internet Stocks



Zomato is the most valuable Internet stocks in Asia’s third-largest economy, with a market capitalization of more than 1.51 trillion rupees ($18 billion). On Friday, its shares rose almost 5% to Rs 173.5.

Several new-age internet companies in India that hit the markets during the IPO frenzy of 2021 surged after listing but ultimately collapsed due to investor skepticism over high valuations and business models. Several of these companies have also fallen below their issue prices.

Zomato, which was the first to feature among its peers like Policybazaar, PayAnd Nykaahad a limited history of profitability and investors were concerned about its strategic decisions.

Now, with the company’s results beating expectations for several quarters, sentiment has “completely reversed,” said Sachin Dixit, an internet research analyst at JM Financial.

“Investors increasingly appreciate everything that Zomato Zomato’s “steady profit improvement” and on-time achievement of growth targets set it apart from its peers who have “no clear path to growing profitability”, Elara “Nykaa, who was a darling of investors , is currently facing some macroeconomic headwinds, Dixit said.

Meanwhile, Paytm, under the regulator’s control, has plummeted.

Zomato, with more than half the market share in food delivery, will continue to dominate IPO-bound Swiggy, analysts said.

Blinkit – Zomato’s fast commerce business, acquired in 2022 – is expected to generate positive EBITDA in the next financial year and is seen by investors as the company’s next growth lever. ($1 = 82.8580 Indian rupees)


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button