Shares of Zomato continued to surge on early Monday after continued momentum from its first-ever profitable quarter, way ahead of its target and street estimates, in Q1 FY24.
What Happened? Continuing to add to its list of firsts, the stock managed to move past the ₹100 mark for the first time too after beginning to levy a platform fee of ₹2 per order for some users on its platform.
Zomato’s first-quarter profits rose to ₹2 crore, a significant turnaround from the ₹186 crore loss in the same period last year. This recovery, boosted by a ₹17 crore deferred tax and improvements in its food delivery business and operations, is a huge leap from the ₹188 crore loss in the last quarter.
However, its quick-commerce arm, Blinkit, struggled with growth due to delivery strikes and heavy rains in North India.
The company’s market capitalization surged to $10 billion (₹82,667 crore) late last week.
What do analysts have to say? After Zomato’s impressive Q2 performance, numerous brokerages remain optimistic. Jefferies kept its “buy” rating and a ₹130 price target, believing in the company’s profit-generating capacity. HSBC also keeps its “buy” rating and sets a ₹102 target, expecting sustainable growth in food delivery.
UBS echoes a “buy” rating with a ₹90 target, highlighting better-than-expected Q1 earnings while JP Morgan continues its “overweight” rating and a ₹100 target, commending Zomato’s early profitability achievement. However, Nomura retains its “reduce” rating with a ₹60 target, cautioning about maintaining long-term growth.
Price Action: Zomato shares were trading 6.55% higher at ₹101.65 closer to mid-day on Monday.
Read next: If You Invest ₹10,000 In Zomato Today, Here’s What Could Happen If The Stock Hits Its All-Time High
Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.