Zomato’s inclusion in the prestigious BSE Sensex index is making waves on Monday, December 23, as the food delivery giant becomes the first new-age tech stock to join the benchmark 30-share index. As part of the half-year rebalancing, Zomato will replace JSW Steel, effective December 23, marking a milestone for both the company and the Indian stock market.
Passive Inflows and Market Impact
Zomato’s entry into the Sensex is expected to attract significant passive inflows, with an estimated $513 million flowing into the stock. Conversely, JSW Steel’s removal from the index could lead to outflows of approximately $252 million, according to Nuvama Alternative & Quantitative Research.
This move reflects Zomato’s growing market leadership and the rising influence of tech-driven companies in India’s stock market. The inclusion also underscores the company’s strong performance and expanding market share.
Impressive Stock Performance
Zomato’s share price has been on an upward trajectory, delivering exceptional returns this year. Over the past six months, the stock price has surged by more than 43%, significantly outperforming the flat performance of the Sensex. Year-to-date, Zomato shares have soared over 126%, while the stock has skyrocketed by 350% over the last two years.
On Friday, Zomato’s shares closed at ₹281.85 apiece, reflecting a market capitalization of ₹2.72 lakh crore. This valuation surpasses some of India’s top companies, including Tata Motors, Adani Enterprises, and Asian Paints.
Financial Growth Drives Performance
Zomato’s strong performance is driven by impressive financial results. In Q2 FY25, the company posted a 389% year-on-year increase in consolidated net profit, reaching ₹176 crore, up from ₹36 crore in the same period last year. This growth was propelled by higher food delivery margins and the quick commerce business, which remains near break-even.
Zomato’s revenue from operations in Q2 FY25 rose by 68% year-on-year to ₹4,799 crore, while adjusted EBITDA surged to ₹331 crore from ₹41 crore in the corresponding period. Gross Order Value (GOV) across its B2C businesses saw a 55% YoY growth, totaling ₹17,670 crore.
Looking Ahead
Zomato’s inclusion in the Sensex not only highlights its financial strength but also cements its position as a major player in the tech-driven sector of India’s stock market. The food delivery giant’s performance, coupled with its growing influence, makes it a stock to watch in the coming months.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies.
