Shares of Zomato rose 14.11 percent to hit a one-year high of Rs 98.39. This comes after food delivery platform Zomato reported a profit after tax (PAT) of Rs 2 billion for the quarter.
Shares of Zomato surged over 14 percent in Friday trading to hit a 52-week high after strong June quarter results. Analysts' stock price targets indicate further upside. Jefferies has a price target of Rs 130 on the stock, while JM Financial pegs it at Rs 115 and Motilal Oswal Securities and Nuvama Institutional Equities peg the stock at Rs 110.
This comes after Zomato said its food delivery platform posted a profit after tax (PAT) of Rs 20 crore for the corresponding quarter, compared with a net loss of Rs 186 crore for the quarter ended June last year.
GM Financial says Zomato's stock is up 35 percent since the March quarter, but the market is largely buoyed by its food delivery business, while Blinkit is waiting for a big value release.
The stock rose 14.11 percent to a one-year high of Rs 98.39 on the BSE.
Zomato's food delivery GOV has been steady over the past two quarters, growing 11%. Management has targeted adjusted profit growth of at least 40% in FY24 and FY25, respectively. Additionally, the company is targeting profitability for Ebitda in the next quarter. Zomato also said it aims to achieve adjusted EBITDA profitability in all three businesses by the end of FY25.
Motilal Oswal Securities expects Zomato to turn positive in reported EBITDA by the March quarter and achieve an EBITDA margin of 5% in FY25. We value the business using the DCF method and assume a terminal growth rate of 4% and a cost of capital of 12.5%.
"We maintain a buy rating with a target of Rs 110, implying a potential upside of 28%," he said. Jefferies believes the stock is worth Rs 130.
Nomura India said Zomato's growth was boosted by seasonal factors such as the school summer season and IPL cricket matches. Due to Zomato Gold's marketing push, monthly transaction users (MTU) grew by 5.4% QoQ to 1.75 billion users.
We expect stronger growth and margin estimates for our core food delivery and Q business businesses in FY24 and FY25. Little change at 5.1%. Our base DCF price target is raised to Rs 60 from Rs 45. It is still difficult to maintain. High government growth and strong CM improvement in core FD business in long term. We still believe that."
"Management has refrained from giving any growth guidance in recent quarters, citing growth uncertainty. Earnings growth of over 40% year-on-year reflects management's confidence, and Mr Nobama, while suggesting a price target of Rs 110 on the stock Kend said: "If we receive "The first achievements of the books, we will focus on that, we will go towards generating FCF."
Zomato's food delivery GOV has been steady over the past two quarters, growing 11%. Management has targeted adjusted profit growth of at least 40% in FY24 and FY25, respectively. Additionally, the company is targeting profitability for Ebitda in the next quarter. Zomato also said it aims to achieve adjusted EBITDA profitability in all three businesses by the end of FY25.