Zomato Faces 6% Share Decline on Q4 Results: Analysts Bullish on Future
Zomato’s shares faced a 6% decline in early trading on Tuesday following the company’s Q4 results announcement. The stock tumbled by as much as 5.98% to ₹182.10 each on the BSE. Zomato revealed a consolidated net profit of ₹175 crore in Q4 FY24, marking a significant turnaround from the ₹188 crore loss reported in the same period the previous year. This represented a 27% increase from the ₹138 crore net profit recorded in the December quarter. Q4FY24 saw Zomato’s revenue surge by 73% to ₹3,562 crore from ₹2,056 crore YoY, with Gross Order Value (GOV) witnessing robust growth across B2C businesses, climbing by 51% YoY to ₹13,536 crore.
Operationally, the company achieved an EBITDA of ₹86 crore, a notable improvement from the ₹226 crore loss incurred in the same period last year. Zomato’s quick-commerce arm, Blinkit, reached operational EBITDA break-even in March 2024.
Analysts remained optimistic about Zomato’s prospects, with some revising their target prices upwards, driven by Blinkit’s sustained outperformance. Emkay Global Financial Services acknowledged Zomato’s consistent operational performance, attributing the margin deviation to higher-than-expected ESOP costs. The brokerage maintained a ‘Buy’ rating with the company’s share price target of ₹230 per share.
Nuvama Institutional Equities highlighted Blinkit’s expansion plans and their potential impact on short-term profitability, reaffirming Zomato’s leadership in quick commerce. They upheld a ‘Buy’ rating and raised the target price to ₹245 per share from ₹180 earlier.
Elara Capital favored the company for its strong presence in the food business, projecting an adjusted EBITDA CAGR of 47% in FY24-26E. They retained a ‘Buy’ rating and raised the share price target to ₹280 apiece from ₹250 previously.
As of 9:20 am, the shares were trading 4.96% lower at ₹184.10 apiece on the BSE.
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