UBS Ratings: Maintains 'buy' for Zomato, upgrades Federal Bank

New Delhi: UBS brokerage firm is optimistic about potential gains for investors eyeing Federal Bank and Zomato shares. Recently, it upgraded its rating on Federal Bank from Neutral to Buy, setting a new target price of Rs. 250, which represents a substantial 40% increase from its previous target of Rs. 180. The firm justified this upgrade by pointing to a favorable risk-reward balance, clarity on the new CEO’s strategic direction, and overall improved market conditions.

Zomato vs. Swiggy

Simultaneously, UBS maintained its Buy rating on Zomato and revised its target price upward from Rs. 250 to Rs. 260. The brokerage firm highlighted intense competition in the food delivery sector, particularly between Zomato and its competitor Swiggy, and projected a 9% growth in Zomato’s Gross Merchandise Value for the first quarter of the fiscal year 2025.

Federal Bank’s stock closed at Rs. 194.95, marking a 1.19% increase, with an intraday high of Rs. 197.19, achieving a new 52-week peak. Over recent periods, Federal Bank has demonstrated robust performance, posting gains of more than 4% in the past five days, approximately 12% in the last month, and nearly 30% in the last six months, with an annual return exceeding 45%.

Conversely, Zomato’s stock is currently trading above Rs. 220. Recent performance metrics indicate gains of over 20% in the last month, nearly 70% in the past six months, and an impressive year-to-date return of more than 180%.

Therefore, UBS’s positive outlook shows substantial potential for Federal Bank and Zomato shares.  By their latest assessments and market dynamics, investors are encouraged to consider these opportunities carefully. This involves risk as market conditions are evolving and competitive in the banking and food delivery sectors.