Zomato Share Price: Zomato, the prominent food delivery platform, reported a consolidated net profit of ₹175 crore for the fourth quarter of FY24, a substantial improvement from a loss of ₹188 crore in the corresponding period the previous year. This marks a significant 27% increase from the ₹138 crore net profit recorded in the preceding December quarter.
Zomato’s revenue from operations in the fourth quarter of FY24 saw a remarkable 73% increase year-over-year, rising to ₹3,562 crore from ₹2,056 crore. The Gross Order Value (GOV) for the March quarter also saw a notable increase, growing 51% year-over-year to ₹13,536 crore across B2C businesses.
At the operational level, Zomato Share posted an EBITDA of ₹86 crore, showing a significant turnaround from a loss of ₹226 crore during the same period last year. This improvement reflects the company’s ongoing efforts to enhance profitability and operational efficiency.
Despite these positive financial outcomes, Zomato share price experienced a 6% drop in early trading on Tuesday following the announcement of the Q4 results, with shares declining as much as 5.98% to ₹182.10 apiece on the BSE.
Zomato’s Quick Commerce Arm Achieves Milestone
Zomato’s quick commerce division, Blinkit, achieved operational EBITDA break-even in March 2024, marking a critical milestone for the segment. This achievement indicates a robust performance and operational efficiency within Zomato’s expanding business verticals.
Market Analysts Maintain Bullish Stance on Zomato Shares
Despite the initial drop in Zomato share price, analysts have maintained a bullish outlook on Zomato, with some financial institutions raising their target price on the stock. This optimism is driven by the continued outperformance of Blinkit and its solid positioning in the quick commerce sector.
Emkay Global Financial Services highlighted Zomato’s steady operational results, noting that revenue was ahead of estimates, although margins were impacted by higher-than-expected ESOP costs. The firm adjusted its future earnings projections slightly due to these factors but maintained a ‘Buy’ rating with a target price of ₹230 per share. This valuation includes contributions from Zomato’s food delivery and Blinkit operations, as well as cash and other investments.
Nuvama Institutional Equities also expressed a positive outlook, planning an increase in Blinkit’s dark store count from 525 in Q4FY24 to 1,000 by the end of FY25. While this expansion may affect short-term profitability, it is expected to solidify Blinkit’s leadership in quick commerce. Nuvama upgraded its valuation of Zomato, raising the target price to ₹245 per share from ₹180.
Elara Capital reiterated its support for Zomato Share due to its strong market position in the food delivery business and excellent execution with Blinkit. The brokerage has raised its consolidated revenue estimates and slightly adjusted its earnings forecasts upwards, setting a new target price for Zomato shares at ₹280, up from ₹250.
Current Trading and Future Outlook
As of 9:20 AM, Zomato shares were trading at ₹184.10, down by 4.96% on the BSE. Despite the short-term volatility in share price following the quarterly results, the long-term outlook for Zomato remains positive, supported by robust growth in core operations and strategic expansions in quick commerce through Blinkit. Investors and market watchers will continue to monitor Zomato’s performance closely, looking for sustained growth and operational efficiency improvements.
Assessing Zomato’s Market Resilience
Despite the initial post-results dip in Zomato share price, the company’s robust financial performance and strategic growth initiatives present a compelling case for potential investors. The marked improvement in net profits and operational efficiencies, combined with the successful scaling of its quick commerce operations through Blinkit, suggests that Zomato is on a firm footing for sustained growth. The company’s ability to significantly boost its revenue and operational EBITDA in a competitive market underscores its resilience and adaptability in response to changing market dynamics.