- Zomato made headlines by turning profitable in Q1 FY24, with earnings of ₹28 crores for the quarter. A clear sign that Zomato is cooking up success!
- From a 52-week low of INR 40.5, Zomato has rocketed up 109%! The shares are now sizzling at 11% above their IPO issue price of INR 76.
- Zomato’s remarkable turnaround story highlights its resilience and adaptability in a competitive market.
Zomato, India’s go-to food delivery platform, is back in the market spotlight with its shares on a 52-week spike of INR 105.9 on October 3rd, a 4.3% surge in a single trading day!
Here’s the scoop
The company has been on a remarkable run since April, surging 77.4% year-to-date and doubling in value in just six months.
And that too on the first trading after announcing the dissolution of their Chile subsidiary. Sounds unbelievable, right? After the significant share sink in the 2022 listing, it’s almost back to its INR 115 debut price—just 8% shy.
While Zomato liquidated a lot of foreign subsidiaries, It seems their focus on the Indian market has taken the throne, taking them to the gold standard for anyone in the food delivery segment. So, what’s driving this growth? In the narrative of new-age tech startups being unprofitable and valuation-chasing folks, they chose to shift their goal.
Zomato’s focus on profitability is coming to fruition. They cracked the profitability code in Q1 FY24, signaling a pivotal moment in its journey. The platform has made changes to boost revenue. One such move is charging a platform fee of INR 2 to INR 3 per food delivery order.
This decision, says Kotak Institutional Equities, could elevate the customer take rate and contribution margin, adding an extra layer of financial flavor.
Zomato isn’t just on the profitability wave; beyond cost-cutting, Zomato has been innovating on its platform, exploring new revenue streams like groceries, dining, etc., and expanding its service offerings. Moreover, their ever-exiting connection with their customers is amazing!
They’ve successfully become the synonym for food getting delivered at home!
Zomato’s comeback story is an example of adaptability and resilience in this highly competitive market. As the company continues to evolve, it’s a stock worth watching closely.