Discover the shocking truth behind Zomato’s recent profit streak! Learn how this food delivery giant is defying the odds and winning big in a challenging market. Read on to uncover the secrets to their success and why experts are buzzing about their potential.
Zomato’s Quarterly Profit Sparks Market Volatility
Zomato’s stock had a rollercoaster ride on Friday following the company’s announcement of a third consecutive quarterly profit, sparking optimism for sustained long-term growth. In the December quarter, Zomato reported a net profit of ₹138 crore, with revenue jumping by 69% year-on-year to ₹3,288 crore.
This positive performance is notable amidst challenges faced by the wider e-commerce sector due to factors like high inflation and weak demand. Zomato credited its strong showing to events like the Cricket World Cup and festive seasons.
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Strong Revenue Growth Amidst E-commerce Challenges
Comparatively, in the same quarter last year, Deepinder Goyal’s Startup incurred a net loss of ₹347 crore with revenue of ₹1,948 crore. The recent earnings report has received positive responses from brokerages, prompting many to raise their target prices for Zomato’s stock.
Bernstein analysts highlighted the food delivery giant’s ambitious goal of achieving 50% year-on-year growth in the medium term. This growth is expected to be propelled by Blinkit, which has demonstrated impressive acceleration, boasting a growth rate of 103% over the past year.
Jefferies increased its target price to ₹205 per share with a “buy” recommendation, citing a favorable outlook for the food delivery segment. Similarly, HSBC raised its target price from ₹150 to ₹163, anticipating gradual performance improvements.
Analyst Insights on Zomato’s Growth Prospects
Elara Securities emphasized the importance of monitoring Zomato’s expansion beyond metro areas and its future competitive landscape. Kotak Securities maintained its “buy” rating with a price target of ₹190, highlighting the company’s steady food delivery business and Blinkit’s rapid growth with reduced losses.
Despite strong risk-off sentiment in the broader market, Zomato’s share price showed resilience, climbing 0.69% to ₹145.45 after an initial 4% gain in early morning trading on Friday.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev and Bernstein have contributed to the above report