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Updated February 9th, 2024 at 11:22 IST

Zomato shares hit fresh 52-week high on strong Q3 results

The surge came after the company posted a consolidated net profit of Rs 138 crore, from a loss of Rs 347 crore in the same quarter a year ago.

Reported by: Tanmay Tiwary
Zomato
Zomato | Image:Zomato
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Zomato hits 52-week high: Shares of food aggregator Zomato climbed as much as 5.17 per cent to hit a fresh 52-week high of Rs 151.45 per share during early trade on Friday. 

The surge came after the company posted a consolidated net profit of Rs 138 crore, from a loss of Rs 347 crore in the same quarter a year ago. 

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The Gurugram-based company’s revenue zoomed 79 per cent annually to Rs 3,288 crore in the December quarter, from Rs 1,948 crore in the same quarter previous fiscal. 

On the operating front, its earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 51 crore, as opposed to EBITDA loss of Rs 366 crore on a year-on-year (YoY) basis. While, the food company’s margin stood at 1.5 per cent. 

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The quick commerce revenue came in at Rs 664 crore, jumping over two-fold from Rs 301 crore in the same quarter a year ago.

On platform fee, Zomato said, “We think it is too early to predict how the platform fee will shape up. Much like the Gold programme, we are still testing the waters on what works and makes sense here from a long term perspective. We will continue to tactically use levers like these to optimise both growth and margin expansion. Most importantly, as we do this, we will also continue to ensure the viability and well-being of each of our stakeholders – our customers, restaurant partners and delivery partners.”

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Meanwhile, brokerage firm JM Financial in a note said, “Zomato reported a very strong December quarter, as most headline numbers were either in line or ahead of its estimates, amid tough macros. Guidance was also robust, with the management suggesting over 50 per cent year-on-year (YoY) growth in Consolidated adjusted revenue in the near term against over 40 per cent guided in the medium term earlier, while also retaining its adjusted EBITDA break-even guidance for Blinkit by first quarter of financial year 2025 (Q1FY25).

The brokerage further said that the profitability across all key businesses was better than expected, driving a strong beat on reported EBITDA as well as profit after tax (PAT). While sequential food delivery gross order value (GOV) could moderate a bit in Q4, owing to a high Q3 base, albeit YoY is likely to remain robust at 20 per cent YoY, Blinkit trends should remain strong due to major underpenetration and new store expansion. Notably, the company added 40 stores in the December quarter.

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“Continued strong operating performance in both these businesses should keep the stock buoyant in the near term, in our opinion. Maintain high conviction ‘buy’ with a target price of Rs 200 per share,” JM Financial added.

On the other hand, brokerage firm Motilal Oswal in a note said, “The food delivery business is still in a nascent stage in India, with a long runway for growth. With a dominant market share and strong growth in the food delivery business and Hyperpure, we expect Zomato to report a strong 38 per cent adjusted revenue compound annual growth rate (CAGR) over the financial year 2024-2026 (FY24-26). After turning positive at the margin level in December quarter, we now estimate Zomato to deliver 4.5 per cent/10 per cent EBITDA margin in the financial year 2025 estimate/financial year 2026 estimate (FY25E/FY26E). We value the business using a discounted cash flow (DCF) methodology, assuming a 5 per cent terminal growth rate and 11.5 per cent cost of capital. We maintain our ‘buy’ rating with a target price of Rs 170, implying 18 per cent potential upside.”

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As of 9:51 am, shares of Zomato were trading 1.91 per cent higher at Rs 146.75 per share. 

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Published February 9th, 2024 at 09:56 IST

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