Zomato’s share price jumped over 4% in early trade on Friday to hit a fresh 52-week high after the company reported impressive results for the quarter ended December 2023, led by robust growth in food delivery business. Zomato shares gained as much as 4.34% to a new high of ₹150.25 apiece on the BSE.
Online food delivery platform Zomato posted a net profit ₹138 crore in the third quarter of FY24 against a loss of ₹347 crore in the same period last year. Zomato’s net profit swelled by 283% quarter-on-quarter (QoQ).
Zomato’s revenue from operations in Q3FY24 came in at ₹3,288 crore, registering a growth of 69%, compared to ₹1,948 crore, YoY.
Read here: Zomato Q3 Results: Net profit at ₹138 crore, revenue up 69% YoY; 5 key highlights
Food delivery gross order value (GOV) – the total value of all orders placed – grew 25% year-over-year (YoY) and the company expects GOV to continue growing at 20%-plus YoY, and may accelerate further if it does. sees better-than-expected market gains and a revival in macro-consumer demand.
Zomato shares ended 2.42% higher on Thursday after the announcement of Q3 results.
Analysts at Emkay Global Financial Services said Zomato posted another quarter of impressive execution, with growth across segments.
“Food delivery GOV grew 6.3% QoQ, but missed our/companies’ expectations due to the muted demand environment. Food contribution margin improved to 7.1%, helped by ad monetization and platform fee. Blinkit continued its stellar run with GOV growing at 28% QoQ, along with a further reduction in losses,” said Emkay Global.
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Zomato now expects consolidated adjusted revenues to grow at 50%+ YoY in the next few quarters, with Blinkit doing the heavy lifting.
Emkay Global increased its FY25-26E EPS estimates by 1-2% factoring in Q3 performance, and revenue mix change. With better clarity emerging on product market fit and roadmap to profitability for Blinkit, it now values it at 1x FY26 GOV, compared to book value earlier.
The brokerage maintained its ‘Buy’ rating on Zomato and raised the target price to ₹170 per share of ₹140 earlier on a SOTP basis, valuing the food delivery business at ₹119 per share according to DCF, Blinkit at ₹36 per share at 1x FY26E GOV; and cash and other investments at ₹15 per share at book value.
Zomato shares have risen over 121% in the past year.
At 9:20 am, Zomato shares were trading 3.75% higher at ₹149.40 per one on the BSE.
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Published: 09 Feb 2024, 09:20 IST