Zomato Share Price

Zomato Limited Fundamental Analysis

Zomato Limited, founded in 2008 by Deepinder Goyal and Pankaj Chaddah, started as a simple service to help users discover local restaurants. From its beginnings as a restaurant directory, Zomato has transformed into a major global player in the food delivery industry, operating in over 25 countries with a user base of over 90 million people.

The company made headlines in 2021 when it went public, achieving a valuation of over $9 billion, marking one of the most successful initial public offerings in Indian history​.

Investors are keenly watching Zomato's performance, wondering where will the Zomato share price target reach in the future. This article will evaluate Yes Bank Limited to learn how its business model and industry fundamentals work and determine whether that makes it a good investment for you.

Zomato Limited

Zomato Limited is a multinational Indian restaurant aggregator and food delivery company. Founded by Deepinder Goyal and Pankaj Chaddah in 2008, Zomato provides information, menus, and user reviews of restaurants, as well as food delivery options from partner restaurants in more than 1,000 Indian cities and towns. It also offers table reservation services.

Zomato’s technology platform serves many purposes by linking together the demands of its customers, restaurant partners, and delivery partners. Customers use the platform for various purposes:

• To search and discover restaurants
• Read and write customer-generated reviews
• View and upload photos
• Order food delivery
• Book a table
• Make payments while dining out at restaurants.

Zomato offers industry-specific marketing tools to partnered restaurants that can help them engage and gain new customers to grow their business.

Zomato's evolution reflects its innovative approach to scaling and diversifying its services. Initially focusing on restaurant reviews and information, the company expanded into food delivery, significantly increasing its market presence.

In response to the changing needs of its customer base, Zomato also ventured into grocery delivery during the COVID-19 pandemic, though this service was later discontinued as the demand for food delivery recovered.

Sustainability is a key focus for Zomato as well. The company is actively engaged in initiatives aimed at climate-conscious deliveries and promoting a waste-free world, aligning with several United Nations Sustainable Development Goals. These efforts are part of Zomato's broader strategy to contribute positively to society and encourage other startups to adopt sustainable practices​.

The company also runs a one-stop procurement solution, Hyperpure which supplies high-quality ingredients as well as kitchen materials to its restaurant partners.

Is the food delivery sector a goldmine investment?

India's food delivery sector has been experiencing a remarkable rise and this trend is projected to continue. The industry has managed to change as per the needs of customers and is now growing at a steady pace.

As a result of increasing numbers of working women, nuclear families, and health-conscious groups, ready-to-eat foods are in great demand.

According to reports, India’s online food market will grow at a CAGR of 25% by 2027 thereby giving restaurants and food delivery businesses a great opportunity.

Investing in Zomato Ltd could be a strategic move considering its robust financials, comprehensive presence across the value chain, and favorable industry trends. This investment could have a positive influence on Zomato share price. There is also a potential increase in Zomato share price forecast to ₹357.49 by the end of 2025, reflecting the company’s promising growth prospects in the coming years.

Who are Zomato Limited competitors in the food delivery sector?

Zomato Limited operates in a competitive food delivery sector. Here are some of its main competitors:

• Swiggy
• Uber eats
• Foodpanda
• DoorDash

History of Zomato Limited

This summary provides a snapshot of Zomato’s journey and achievements:

• Incorporation: Zomato was founded as FoodieBay in 2008 by Deepinder Goyal and Pankaj Chaddah. It was incorporated on January 18, 2010, and later renamed Zomato.
• Product range: Zomato started as a restaurant listing and review platform and has expanded to include food delivery services from partner restaurants in over 1,000 cities. It also offers table reservations and operates Hyperpure, supplying high-quality ingredients to restaurants.
• Infrastructure: Zomato has a significant infrastructure with a network of weather stations for real-time updates and had previously launched Zomato Infrastructure Services for cloud kitchens.
• Certifications: Zomato holds an FSSAI License and is ISO/IEC 27001:2013 certified.
• Awards and recognition: Zomato has been recognised with awards like the Zomato Online Ordering Awards 2019 and the ET Startup Awards 2021 for its impact on the Indian startup ecosystem.

Company profile of Zomato Limited

Pros:

• Strong presence: Zomato has a strong footprint across 23 countries with 131,233 active food delivery restaurants, 161,637 active delivery partners, and an average monthly food order of 10.7 million customers.
• Growth opportunities: There are a lot of growth opportunities in tier II and III cities and towns in India, which could potentially influence the Zomato share price target.
• Innovation and adaptability: Zomato’s success can be attributed to its relentless pursuit of innovation and ability to adapt to changing consumer preferences.

Cons:

• High valuation: Zomato’s valuation is considered expensive compared to its global peers. The stock is trading at 7.74 times its book value. This high valuation could impact the Zomato share price forecast as it might deter some investors, potentially leading to a slower price growth.
• Frustration among restaurants: Restaurants are increasingly getting frustrated with the amount of commission charged by food aggregators like Zomato. This could potentially lead to a decrease in partnerships.
• Dependence on the Indian market: Despite global ambitions, Zomato is still primarily dependent on the Indian market and macroeconomic growth

The finances and Zomato share price forecast

Here’s a summary of Zomato Limited’s financial information as of June 2024:

The Zomato share price forecast suggests a potential rise to Rs. 432.26 in the next 3 years and Rs. 604.37 in the next 5 years, while the Zomato share price today is Rs. 198.14.

Shareholding pattern of Zomato Ltd.

The shareholding pattern of a company can significantly impact the Zomato share price chart. This is because the distribution of shares among different types of investors can influence market sentiment and thus, the stock price

As of the latest data, the shareholding pattern of Zomato Ltd. is as follows:

• Promoters: Hold 0%
• Foreign institutional investors (FII): 55.1%
• Domestic institutional investors (DII): 15.3%
• Public: 28.1%

Peer multiple comparison

It’s important to note that while Zomato is a publicly listed company, its competitors such as Swiggy, Uber Eats, Foodpanda, and DoorDash are not. This means that the financial data and other key metrics of these companies are not publicly available, making a direct comparison challenging.

However, one advantage of Zomato being a publicly listed company is the transparency it provides to investors and the market. For instance, the Zomato share price is publicly available and as of the latest update, it stands at Rs. 198.151. This information can be useful for potential investors to make informed decisions.