Zomato’s stock price experienced a 6% decline in early trading on Tuesday following the company’s announcement of its Q4 results. Zomato shares plummeted by as much as 5.98% to ₹182.10 each on the BSE. The food delivery platform disclosed a consolidated net profit of ₹175 crore in the fourth quarter of FY24, a significant improvement compared to the ₹188 crore loss recorded in the corresponding period of the previous year. This marked a 27% increase from the ₹138 crore net profit reported in the December quarter. Zomato’s revenue from operations in Q4FY24 surged by 73% to ₹3,562 crore from ₹2,056 crore year-on-year (YoY). The Gross Order Value (GOV) for the March quarter exhibited robust growth across B2C businesses, climbing by 51% YoY to ₹13,536 crore.
On the operational front, the company achieved an EBITDA of ₹86 crore, a noteworthy improvement from the ₹226 crore loss incurred during the same period last year. Zomato’s quick-commerce subsidiary, Blinkit, achieved operational EBITDA break-even in March 2024.
Analysts continued to express optimism about the shares, with some revising their target prices upward, driven by the sustained outperformance of Blinkit.
Here’s a summary of analysts’ views on Zomato’s Q4 results and its share price:
Emkay Global Financial Services acknowledged Zomato’s steady operational performance, noting that while revenue exceeded expectations, margin deviation was primarily due to higher-than-anticipated ESOP costs. The brokerage maintained a ‘Buy’ rating with a share price target of ₹230 per share on an SOTP basis.
Nuvama Institutional Equities highlighted Blinkit’s expansion plans and its potential impact on short-term profitability, affirming the company’s leadership in quick commerce. They maintained a ‘Buy’ rating and raised the target price to ₹245 per share from ₹180 earlier.
Elara Capital favored the company for its strong foothold in the food business and projected an adjusted EBITDA CAGR of 47% in FY24-26E. They maintained a ‘Buy’ rating and raised the Zomato share price target to ₹280 apiece from ₹250 earlier.
As of 9:20 am, Zomato shares were trading 4.96% lower at ₹184.10 apiece on the BSE.
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