Buy or Sell or Hold Zomato Share :Today, there is a sharp recovery in the shares of food delivery online platform Zomato. The share has strengthened by about 2.5 percent and reached Rs 264. Whereas at the beginning of trading it has declined by 5 percent. The company had released its quarterly results on October 22, 2024, which have been liked by the brokerage houses. Most of the brokerage houses have advised to buy shares. However, a brokerage house has given underperform rating and kept the target price at Rs 100.
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Zomato’s profit (PAT) has increased almost 5 times on annual basis to Rs 176 crore in the September quarter, whereas the profit in the same quarter a year ago was Rs 36 crore. At the same time, PAT has decreased by 30 percent as compared to Rs 253 crore in the previous June quarter. The company’s revenue increased by 69 percent on an annual basis to Rs 4799 crore, which was Rs 2848 crore in the same quarter a year ago. Revenue in the June quarter was Rs 4206 crore.
What is the rating and target price of the brokerage house?
Brokerage House Motilal
Rating: Buy
Target price: Rs 330
Brokerage House ICICI Securities
Rating: Buy
Target price: Rs 300
Brokerage House Nuvama
Rating: Buy
Target price: Rs 325
Brokerage House UBS
Rating: Buy
Target price: Rs 320
Brokerage House HSBC
Rating: Buy
Target price: Rs 330
Brokerage House Macquarie
Rating: Underperform
Target price: Rs 100
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What does the brokerage house say?
Brokerage House Motilal Has given Buy rating on Zomato and has kept the target price at Rs 330, which is 29 percent more than yesterday’s closing price of Rs 256. The brokerage says that while the company’s food delivery business is stable, Blinkit provides a generational opportunity to participate in the disruption of industries like retail, grocery and e-commerce. The brokerage’s estimates are largely unchanged, as growth in Blinkit GO as a result of dark store network expansion has been offset by a decline in profitability due to increased capex and investments. It is estimated that Zomato’s PAT margin may be 4.7%, 8.6% and 12.9% in FY25, FY26 and FY27.
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Brokerage House ICICI Securities Has given Buy rating to Zomato’s stock and has kept the target price at Rs 300, which is 17 percent more than yesterday’s closing price of Rs 256. The brokerage says that in Q2FY25, Zomato has maintained an annual growth of more than 20 percent in food delivery. Gross take rate has declined by 20 bps on quarterly basis. ‘Zero delivery charges’ may be due to higher order ratio. However, net take rate remained steady at 21.5% (I-sec estimate) as Zomato continued to expand its restaurant base (up 5.8% QoQ). Corporate overheads grew 8.9 percent quarter-on-quarter due to investment in marketing by management. According to the management, the company’s board has approved raising funds of up to US $ 1 billion to strengthen its balance sheet.
(Disclaimer: The view or advice on the share is given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)