Shares of Zomato, the online food delivery platform rallied over 19 per cent to hit a fresh all-time high of Rs 278.70 on Friday after the company reported better-than-expected April-June quarter (Q1FY25) results.
The company management guided for 20 per cent-plus growth in the short term in the Food Delivery (FD) business and set a target to increase Blinkit’s dark store count from 639 in the June quarter to 2,000 by the end of the financial year 2026. Brokerage firms raised their target prices across the board and market experts were largely positive on the stock post Q1 earnings and expect up to 50 per cent potential upside on the stock.
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The Deepinder Goyal-led food aggregator’s net profit in the June quarter of the current fiscal rose multi-fold to Rs 253 crore compared to Rs 2 crore in the year-ago quarter. On a sequential basis, the company’s net profit grew 44.5 per cent from Rs 175 crore in the previous quarter.
Zomato’s revenue from operations surged 74 per cent YoY to Rs 4,206 crore in June 2024 quarter 2,612 crore in the year-ago period.
Total expenses for the company increased to Rs 4,203 crore in the reported quarter up from Rs 3,636 crore in the previous quarter and Rs 2,612 crore in the year-ago period.
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At, 11:15 am, Zomato shares were trading at Rs 262, up 12 per cent from its previous closing price on the NSE. The stock has surged over 81 per cent in the last six months and over 206 per cent in the last one year.
Brokerage firm Motilal Oswal said in its report that Zomato’s food delivery business is stable, and Blinkit offers a generational opportunity to participate in the disruption of industries such as retail, grocery, and e-commerce.
“We value the business using a DCF methodology, assuming 12.5 per cent cost of capital. We maintain our BUY rating with a TP of INR300, implying a 25 per cent potential upside,” the brokerage said.
ICICI Securities maintained a ‘buy’ rating on the stock with a three-stage DCF-based target price of Rs 300. “Zomato remains our top pick in the Indian internet space,” the brokerage said.
According to Nuvama, Zomato continues to deliver on its promise of strong growth along with improvement in profitability. The management is not dialling down on growth ambition, citing a 2,000 dark store addition target by 2026.
The brokerage maintained ‘buy’ rating on the stock with a revised target price of Rs 285 based on valuation rollover to September-26E.
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