Zomato share price jumps over 4% to 52-week high as analysts raise target after strong Q3 results; Should you buy?

Om Sharma
By Om Sharma 3 Min Read

FEBRUARY 09, 2024


In a significant turnaround, Zomato recorded a noteworthy achievement in the third quarter of FY24, posting a net profit of ₹138 crore compared to a substantial loss of ₹347 crore in the corresponding period of the previous year. This remarkable performance underscores a remarkable 283% increase in net profit on a quarter-on-quarter (QoQ) basis, marking a substantial leap forward for the company.


Robust Growth and Profit Surge
: Zomato’s stock witnessed a significant surge, escalating by over 4% to achieve a new 52-week high, propelled by the company’s impressive financial performance in the last quarter of 2023. The highlight was the remarkable turnaround from a loss of ₹347 crore to a net profit of ₹138 crore, marking a remarkable 283% increase on a quarter-on-quarter basis. This surge was primarily attributed to the substantial growth in its food delivery business.

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Optimistic Revenue Projections and Market Sentiment: With a 69% increase in revenue from operations in Q3FY24 compared to the previous year, Zomato continues to project strong growth prospects, especially in its food delivery segment. Despite facing challenges such as a subdued demand environment, the company anticipates a sustained growth trajectory with a 25% year-on-year increase in gross order value (GOV). Foreign brokerage firm Jefferies raised its adjusted EBITDA estimates, further bolstering market confidence and providing a ‘Buy’ rating with an upgraded target price, reflecting a positive outlook.

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Strategic Focus and Future Outlook: Zomato’s strategic focus on expanding its market share and enhancing operational efficiencies underscores its commitment to long-term sustainability and profitability. With Blinkit driving substantial growth and potential profitability, the company aims for consolidated adjusted revenue to grow at 50%+ year-on-year in the coming quarters. Analysts at Emkay Global Financial Services echoed this sentiment, affirming a ‘Buy’ rating and revised target price, emphasizing Zomato’s evolving revenue mix and promising performance of its subsidiaries, further solidifying investor confidence in the stock.

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