In the ever-changing landscape of the Indian stock market, Zomato has emerged as a major player in the food delivery and Q-commerce industries. Zomato shares recently increased 14.11 percent, reaching a one-year high of Rs 98.39 on the Bombay Stock Exchange (BSE). The company’s meal delivery platform earned a significant profit after tax (PAT) of Rs 2 crore for the quarter, causing investors to be optimistic about its future possibilities.
Zomato Stock
The increase in Zomato’s stock price has been linked to a number of causes, including the company’s recent financial performance. According to JM Financial, a renowned financial services organization, Zomato’s shares have already increased by 35% since the company’s previous quarterly reports in March. This upward trend is projected to continue as the market recognizes the potential value in Zomato’s second venture, Blinkit, which has yet to realize considerable value.
Zomato’s growth narrative is mostly around its meal delivery Gross Order Value (GOV), which increased by 11% sequentially after being relatively stable in the previous two quarters. The company’s management has set lofty expectations for adjusted revenue growth in both FY24 and FY25, aiming for 40%-plus growth in both. Furthermore, Zomato is intended to achieve EBITDA profitability in all three of its business areas by FY25, not only the meal delivery sector.
Market professionals and research organizations have also voiced optimism about Zomato’s stock. Motilal Oswal Securities expects that Zomato will generate positive reported EBITDA by the March quarter and that the business will have a 5% EBITDA margin in FY25. Using the discounted cash flow (DCF) approach, their valuation model suggests a target price of Rs 110 per share, representing a considerable 28 percent potential upside from current levels. Another prominent brokerage firm, Jefferies, estimates Zomato’s stock is worth Rs 130.
Nomura India emphasizes the relevance of seasonal elements in Zomato’s recent success, such as the summer vacation season for schools and the Indian Premier League (IPL) cricket tournament. Monthly Transacting Users (MTUs) climbed by 5.4 percent QoQ, hitting 1.75 crore users, thanks to marketing
initiatives tied to the Zomato Gold program. While noting Zomato’s development potential in its core food delivery and Q-commerce businesses, Nomura is concerned about the long-term hurdles of maintaining fast growth and solid profitability. Based on their DCF valuation, they have set a target price of Rs 60 per share.
Nuvama, another expert, finds a good shift in Zomato’s attitude. Due to uncertainties, management previously hesitated from issuing specific growth guidance, but recent outcomes have boosted its confidence. Nuvama sets a target price of Rs 110 for Zomato’s stock based on the company’s first profitable quarter and impressive revenue growth predictions.
Finally, Zomato’s stock has risen dramatically, approaching the desired Rs 100 milestone. Investors and analysts alike are encouraged by the company’s recent profitable quarter, as well as its optimistic growth plans and potential value unlocking in Blinkit. However, investors should be aware that the stock market can be volatile, and they should carefully consider all considerations before making any investing
decisions. As Zomato navigates the extremely competitive food delivery industry and expands its Q-commerce business, only time will tell if the company can maintain its upward trajectory and meet market participants’ high expectations.
Nuvama, another expert, finds a good shift in Zomato’s attitude. Due to uncertainties, management previously hesitated from issuing specific growth guidance, but recent outcomes have boosted its confidence. Nuvama sets a target price of Rs 110 for Zomato’s stock based on the company’s first profitable quarter and impressive revenue growth predictions.
Finally, Zomato’s stock has risen dramatically, approaching the desired Rs 100 milestone. Investors and analysts alike are encouraged by the company’s recent profitable quarter, as well as its optimistic growth plans and potential value unlocking in Blinkit. However, investors should be aware that the stock market can be volatile, and they should carefully consider all considerations before making any investing
decisions. As Zomato navigates the extremely competitive food delivery industry and expands its Q-commerce business, only time will tell if the company can maintain its upward trajectory and meet market participants’ high expectations.