Shares of Zomato rose over 2 per cent on the NSE on Wednesday after it tanked two days post the company’s Q4 financial results, although analysts gave thumbs up to its performance. Analysts also expect its weightage in the MSCI EM Index likely to go up after today’s rejig by the global index major that will take effect from May 31.
The food delivery aggregator platform had reported a consolidated net profit of ₹175 crore in the March quarter as against a net loss of ₹188 crore in the corresponding period in the previous fiscal.
Also read: Zomato hits 20-month high after delivering strong Q3The company had also disclosed that its subsidiary Zomato Payments Private Ltd has decided to voluntarily surrender the certificate of authorisation issued by RBI to operate as an online payment aggregator.
Brokerages callMost brokerages, including Nuvama, Jefferies and Nomura , remained positive on the stock and retained their ‘buy’ ratings on Zomato.
Domestic brokerage Kotak Securities maintained its ‘buy’ rating for the stock but cut the target price to ₹225 from ₹230.
Emkay Global retained its ‘buy’ rating on the stock with a target price of ₹230 from the earlier ₹170.
The analysts have increased FY25/FY26E EPS by 41-52 per cent (EBIT by 18-20 per cent) factoring in higher growth. margin assumptions for Blinkit and lower ETR. With better clarity on product-market fit and roadmap to profitability for Blinkit, they added, “we now value it on DCF, compared to 1x FY26E GOV earlier.”
Analysts of JM Financial have increased GOV/Revenue estimates for Blinkit by 15-41 per cent over FY25/26, which has led to a change in SOTP-driven Mar’25 FV for the Zomato stock to ₹260 from ₹200 earlier.
Maintaining ‘buy’ call, the brokerage quoted, “We expect Blinkit to double down on growth post break-even at Adj. EBITDA levels by 1QFY25, which should ensure exponential growth for the business in the near to medium term.” It is believed that Blinkit in the long term will command premium profit multiples to Zomato’s own food delivery business as it is relatively more sticky and a play on retail commerce (bigger TAM and longer growth runway).
Also read: Zomato offers daily payout option for small restaurant playersGlobal brokerage Nomura said that the company’s food delivery business continues to grow steadily.
UBS maintained its ‘buy’ call on the stock with a target price of ₹250.
Jefferies upped the target price to ₹230 from ₹200 and maintained the ‘buy’ call.
CLSA, maintaining its ‘buy’ call, set the target price at ₹248. The brokerage highlighted the company’s strong guidance for Blinkit.
Meanwhile, Bernstein maintained its ‘outperform’ rating raising the target price to ₹230 from ₹200.
The stock ended 2.14 per cent higher on Wednesday’s trade at ₹191.30 on the NSE.
It ended at ₹191.95 on the BSE, higher by 2.40 per cent.
