Zomato Skyrockets: Unstoppable Bullish Brokerage Call Electrifies Investors | Capital Market News

Zomato Surges on Brokerage Upgrade, Hits New Record High

Last Updated: Aug 19, 2024 | 1:33 PM IST

Zomato’s stock climbed 2.08% to Rs 270, hitting a record high of Rs 280, following a target price upgrade from a foreign brokerage that also maintained its ‘buy’ rating. The stock has soared 190% over the past year. The brokerage raised its target price for the delivery platform from Rs 260 to Rs 320 per share, citing strong first-quarter performance and optimistic guidance.

The company’s June quarter results exceeded expectations with stronger-than-anticipated GMV growth in quick commerce, which saw a robust 27% increase in food delivery. Both quick commerce and food delivery outperformed projections, and margins in both segments expanded more than expected.

The brokerage increased its FY26-28 GMV estimates for quick commerce by 20-30% and for food delivery by 2-3%. Currently, Zomato trades at 35x FY27 EV/EBITDA, higher than the 30x average for its Indian consumer/retail peers, reflecting its superior growth and margin profile.

Zomato’s consolidated net profit surged to Rs 253 crore this quarter compared to Rs 2 crore in the same period last year. Revenue from operations increased by 74.09% YoY to Rs 4,206 crore in Q1 FY25. Adjusted EBITDA rose to Rs 299 crore from Rs 12 crore in the same quarter last year, with the EBITDA margin improving to 3.4% in Q1 FY25.

Zomato connects customers, restaurant partners, and delivery partners, offering services like restaurant search, food delivery, table booking, and payments. For restaurant partners, it provides marketing tools and reliable last-mile delivery, alongside a procurement solution, Hyperpure, for high-quality kitchen supplies.

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First Published: Aug 19, 2024 | 1:17 PM IST

Original Story https://www.business-standard.com/markets/capital-market-news/zomato-spurts-on-bullish-brokerage-call-124081900388_1.html
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