Zomato‘s share price surged over 16% to a record high of Rs 261 after the company’s net profit for the June quarter of the current financial year (Q1FY25) grew multi-fold to Rs 253 crore, compared to Rs 2 crore in Q1FY24.
Sequentially, the food aggregator net profit increased by 44.5% from Rs 175 crore in the preceding quarter. Zomato’s revenue from operations rose 74% year-on-year to Rs 4,206 crore in Q1FY25, up from Rs 3,562 crore in the previous quarter, marking a 19.2% increase.
Brokerages on Zomato
UBS on Zomato
According to a UBS report on Zomato, the firm has maintained a “Buy” rating with a target price of Rs 260. The report highlighted strong results across all segments for Q1FY25 and provided guidance of over 40% year-on-year growth in adjusted revenue for the next couple of years.
UBS also projected that the food delivery segment should be able to grow at a similar rate over the next five years as it did from FY20 to FY24, which was approximately 30%.
Motilal Oswal on Zomato
Motilal Oswal maintains a “BUY” rating on Zomato with a target price of Rs 300, indicating a 25% potential upside from the current price. The report underscores the stability of Zomato’s food delivery business and highlights Blinkit as a key opportunity for disrupting industries like retail, grocery, and e-commerce.
Using a discounted cash flow (DCF) methodology with a 12.5% cost of capital, Motilal Oswal supports its target of Rs 300. The firm reaffirms its positive outlook on Zomato, reflecting confidence in the company’s growth prospects and market position.
CLSA on Zomato
Brokerage firm CLSA has reiterated its “buy” recommendation for food delivery aggregator Zomato Ltd. and raised its price target to Rs 350, up from Rs 248 previously. This revised target is the highest on the street following the company’s June quarter results reported on Thursday afternoon.
CLSA has raised its earnings estimates for Zomato by 6% to 36% for the financial years 2025-2027. The upgrade comes in light of improved performance at Blinkit, despite a significant increase in the number of dark stores.
JM Financials on Zomato
JM Financials maintains a “BUY” rating on Zomato with a revised target price of Rs 260, up from Rs 230. The report highlights that the company’s consolidated revenue, adjusted EBITDA, and reported EBITDA exceeded estimates by 4-6% for Q1, driven by strong performance in the Food Delivery (FD) and Hyperpure segments, and profitability in the Going-out segment.
JM Financials expects Zomato to achieve over 20% GOV growth in the FD business over the medium term and maintain a 4-5% adjusted EBITDA margin in the near future. QC GOV is anticipated to sustain exponential growth, supported by strong demand and significant store expansions. The firm has also raised its earnings estimates by 2-15% for FY25-27.
Stock Performance in last one year
In terms of stock performance, Zomato shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 27.74% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 85.25%, indicating a strong upward trend.
Year-to-date, Zomato shares have surged by 113.97%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 213.46% in the last twelve months, emphasizing its sustained growth and attractiveness to investors.
