This ‘District’ app enables customers to discover and reserve tables at restaurants while also booking tickets for movies, sports, live performances, among other events
Explaining its optimism for Zomato, Jefferies cited new use cases emerging from Zomato’s going-out venture, starting with dining out and ticketing
It gave a price target of INR 335 to Zomato’ shares, an upside of 17.09% from the previous close price of INR 286.10
Brokerage firm Jefferies has maintained a ‘Buy’ rating for Zomato, citing optimism over the foodtech major’s newly launched ‘District’ app for its ‘going-out’ business.
Yesterday (November 28), it gave a price target of INR 335 to Zomato’ shares, an upside of 17.09% from the previous close price of INR 286.10.
Earlier this month, Zomato
rolled out the ‘District’ app on both Apple’s iOS and android platforms, with an aim to establish the going-out segment as its third largest B2C business.
This ‘District’ app enables customers to discover and reserve tables at restaurants while also booking tickets for movies, sports, live performances, among other events.
Explaining its optimism for Zomato, Jefferies cited new use cases emerging from Zomato’s going-out venture, starting with dining out and ticketing.
“Starting with dining-out & ticketing, new use cases will emerge. The industry is in its infancy as the current TAM may be limited, but that is how food delivery and quick commerce (QC) were until a while back,” Jefferies added.
The brokerage firm pointed out that the ticketing market is supply-constrained, which offers opportunity. “Ask the Coldplay and Diljit Dosanjh fans in India who are still trying their luck to get a pass!” it added.
It is pertinent to note that in order to further boost its growth initiatives, ZOmato has raised INR 8,500 Cr (around $1 Bn) through its first qualified institutional placement (QIP).
The company is also looking to expand its quick commerce business Blinkit, with INR 2,137 Cr allocation towards setting up and running operations of dark stores and warehouses.
Further, Zomato plans to utilise INR 2,492 Cr towards advertising, marketing and branding initiatives across its businesses.
The foodtech giant plans to invest INR 1,769 Cr to strengthen its tech stack, including cloud infrastructure and software. The additional capital will likely also help Zomato scale its going-out or District vertical.
On a broader time frame, Zomato’s stock has witnessed a significant uptrend since the beginning of this year on the back of its improving fundamentals and profitable quarters.
On a YTD basis, its stocks have given a return of 125.06 % to its investors.
Zomato’s stock was trading 3% lower at INR 277.70 at 1:20 PM on the BSE today.
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