Food delivery platform player has rallied and witnessed a rock-solid rebound since it hit all-time lows on May 11.
In the last 20 days, the counter has not looked back and rallied as much as 60 per cent to Rs 79.80 on Wednesday. The scrip registered a secular rally to race past its issue price of Rs 76 once again.
Thanks to a 6 per cent intra-day rise in the counter, the market capitalization of Zomato swelled over Rs 62,000 crore during the day.
Despite this linear rise, Zomato is still trading 53 per cent below its all-time high of Rs 169.10, scaled in mid-November 2021.
Financial performance
The food delivery platform reported a consolidated net loss for the quarter ended March 2022 at Rs 359.7 crore compared with Rs 134.2 crore in the corresponding quarter last year.
Revenue from operations came in at Rs 1,211.8 crore, up 75.01 per cent as against Rs 692.4 crore in the same quarter last year.
For the fiscal year 2022, losses of the company came in at Rs 1,222.5 crore, higher than Rs 816.4 in the previous year. Revenue increased to Rs 4,192.4 crore from Rs 1993.8 crore. Its average order value for FY22 was Rs 398 compared to Rs 397 for FY21.
Brokerage Outlook
After Zomato’s earnings for the March 2022 quarter, the majority of the brokerage firms are bullish on the counter with target prices suggesting a strong upside in the counter.
Global brokerage CLSA has maintained its buy rating on Zomato with a target price of Rs 90 on the counter after better-than-expected results and improved operational performance.
Conservation of cash and focus on profitability are key for the company, it added. “Enhanced disclosures are also key positives”
Another global brokerage Morgan Stanley has maintained its ‘overweight’ rating on the food delivery firm Zomato, with a target of 135. It noted that the company is moving in the right direction, but needs consistent execution to meet high expectations.
Back home,
is also bullish on Zomato and has suggested to buy the counter with a target price of Rs 115, down from Rs 140 earlier.
“Zomato reported significant sequential improvement in all key operating and financial metrics in 4QFY22. With a dual focus on growth and profitability, management guided for sequential topline growth to accelerate to double digits in Q1FY23 while EBITDA losses are also expected to decline meaningfully.”
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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