Zomato Shares Price – Zomato’s Strong 2024 Rally Fizzles Out: Why the Stock is Falling
Zomato Shares Price – Shares of Zomato, the popular online food delivery platform, fell by more than 4.5% during the January 13 trading session, bringing the stock price down to Rs 231. This marks a significant drop of nearly 20% over the past three weeks, continuing a downward trend that has affected the stock for the seventh consecutive session since January 2, 2025.
Zomato’s Stock Faces a Steady Decline: What’s Driving the Drop?
Zomato’s stock has been under significant pressure, having declined by more than 23% since hitting an all-time high of Rs 304.7 on December 9, 2024. The current market capitalisation of Zomato stands at Rs 2.24 lakh crore according to data from the Bombay Stock Exchange (BSE). The stock’s price-to-earnings (P/E) ratio is currently around 140, indicating that the stock remains relatively expensive in terms of its earnings potential.
Brokerage Downgrades Contribute to Zomato’s Stock Decline
The sharp fall in Zomato’s share price has been further exacerbated after global brokerage firm Jefferies downgraded the stock to a ‘hold’ rating last week. The downgrade was attributed to concerns over the sharp rally in the stock through 2024 and rising competition in the rapidly growing quick commerce space. Jefferies highlighted that while the stock had gained significantly, it was now facing significant risks from the competition and its overvaluation.
Previously, Macquarie—another major brokerage firm—had retained its ‘underperform’ rating on Zomato, even as the stock surged during the latter half of 2024. In November 2024, Macquarie had flagged downside risks, projecting a potential decline in Zomato’s stock value of around 50%. Despite the stock’s impressive rally, Macquarie expressed concerns about the long-term sustainability of its growth.
Zomato’s Strong 2024 Performance, But Pressure Builds in 2025
Despite the recent decline, Zomato’s shares had a strong performance in 2024, more than doubling in value. The stock surged by over 123%, starting the year at Rs 124 and closing at Rs 278 by the end of December. However, the recent fall has raised questions about whether the stock’s rapid ascent was sustainable, particularly with heightened competition in the food delivery and quick commerce sectors.
Rival Swiggy Faces Similar Pressure
Zomato’s main competitor, Swiggy, has also seen a decline in its stock price. Currently trading around Rs 468, Swiggy’s stock is down approximately 5%, marking a 24% drop from its record high of Rs 617 on December 23, 2024. This decline mirrors the struggles seen across the broader market, as the Sensex has fallen over 700 points, contributing to the pressure on both Zomato and Swiggy.
Market Sentiment and the Broader Economic Context
The broader market sentiment has been weak in early 2025, with investors facing increased uncertainty. The Sensex, one of India’s benchmark indices, has witnessed substantial volatility, which has affected tech stocks and online delivery platforms like Zomato and Swiggy. The decline in both companies’ stock prices is a reflection of the broader market correction, as investors take a more cautious approach to stocks that have seen significant price appreciation in recent months.
What’s Next for Zomato? Potential Risks and Opportunities
As Zomato navigates through this period of heightened volatility, the key question is whether the stock can recover from its recent declines. Analysts have pointed out that while Zomato’s growth prospects in the online food delivery and quick commerce sectors remain promising, the increasing competition from rivals and the potential for regulatory challenges could weigh on its future performance.
The PE ratio of 140 suggests that the stock remains relatively expensive compared to its earnings potential, and if the market sentiment continues to sour, Zomato may face further pressure in the coming weeks.
Conclusion: Navigating Zomato’s Volatile Path Ahead
Zomato’s stock has faced significant headwinds recently, following a period of strong growth in 2024. The downgrade from Jefferies, combined with concerns about rising competition, has added to investor uncertainty. Additionally, Swiggy’s struggles in the market indicate that the entire online food delivery sector is under pressure.
Investors in Zomato will need to carefully monitor the stock’s performance in the coming weeks, as the company navigates through challenges in a competitive environment. Although the stock has experienced notable gains in the past year, its future performance will depend on its ability to sustain growth amidst market fluctuations and intensifying competition.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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