zomato share price: Zomato zooms 13% after strong Q2 show but brokerages are not smacking lips
The online food delivery platform reported a reduced consolidated net loss of Rs 250.8 crore for the second quarter ended September 2022 as compared to Rs 434.9 crore in the year-ago period.
Zomato’s revenue from operations increased to Rs 1,661.3 crore during the July-September quarter as against Rs 1,024.2 crore in the corresponding period of the previous financial year.
Following the earnings announcement, shares of Zomato rallied 13% to Rs72.25 before trading at Rs 70.4 at 10.00 am. The scrip had settled at Rs 63.95 on Thursday.
The company said that this is the first quarter where it has crossed the billion-dollar annualised revenue mark. Its total expenses also rose to Rs 2,091.3 crore during the quarter under review, from Rs 1,601.5 crore a year ago.
Zomato CEO, Akshant Goyal, said that the transaction with Blinkit closed on August 10, 2022, and hence the financials for Blinkit have been consolidated from that date.
“Our adjusted revenue grew by 1% quarter-over-quarter and 48% year-over-year to Rs 21.07 billion (Rs 2,107 cr) in Q2FY23,” he said.
Despite the strong quarterly performance, brokerage firms are not too excited over the counter and have mixed ratings on the new-age stock.
believes that the management’s guidance towards attaining EBITDA-breakeven for Zomato business by Q1FY24 would require careful calibration of employee expenses and marketing spends.
We estimate EBITDA margin of -1.3% for FY24E, it said. “Hyperpure business is likely to benefit from growth in the overall segment,” it added. The brokerage has a hold rating on Zomato with a DCF-based target price of Rs 65.
Bank of America Securities remains neutral on the stock with a target price of Rs 67. The brokerage believes that the company reported better-than-expected core business growth and is balancing growth and profitability.
However, Goldman Sachs has maintained a buy call on Zomato with a target price of Rs 100 apiece citing a strong beat on profitability in Q2.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
