Last updated: February 09, 2023, 11:34 AM IST
All eyes are now on Zomato’s October-December 2022 quarterly results to find out if the new-age tech company can follow in the footsteps of its peers.
Zomato’s stock was quoted at Rs 56.10 apiece on the National Stock Exchange, up 3.3 percent in early Thursday trading.
Zomato’s stock was quoted at Rs 56.10 apiece on the National Stock Exchange, up 3.3 percent in early Thursday trading. With Paytm turning profitable in the third quarter, all eyes are now on Zomato’s October-December 2022 quarterly results to find out if the new-age tech company can follow in the footsteps of its peers.
Yesterday, shares of Zomato rose more than 8 percent in early trading during a rally in the broader markets. The rise in Zomato shares came as the founder of the food aggregator firm Deepinder Goyal Paytm and its founder Vijay Shekhar Sharma congratulated on their Q3 earnings show.
The food delivery platform is expected to post a 68 percent year-over-year revenue increase, but losses could widen, according to brokers.
Much of the optimism stems from foreign brokerage CLSA’s ‘Buy’ rating of the stock with a target price of Rs 70.
According to Kotak Institutional Equities, Zomato’s revenue could rise 68 percent year-on-year and 12.6 percent sequentially to Rs 1,871 crore, due to higher deliveries and gross trade value.
However, the net loss may double from Rs 251 crore to Rs 500 crore due to Blinkit integration costs. “Loss will accrue sequentially due to Blinkit’s full-quarter consolidation (versus 50 days of consolidation in 2Q),” it noted.
Last month, the stock took a hit after reports said it will discontinue its 10-minute food delivery offering, Zomato Instant. But the company clarified that it will “rebrand” Instant, not discontinue it.
A strong large footprint makes Zomato a key contender to capitalize on the huge potential in the food delivery industry, believes broker Motilal Oswal, who has a buy rating for the new-age tech stock with a target price of Rs 67. From current levels, it indicates a 24 percent increase.
“Gross order value (GOV) for food delivery grew 23 percent year-over-year in Q2FY23, led by healthy growth of approximately 200 percent year-over-year in the Hyperpure business. Management has led the EBITDA break even for ex-Blinkit business by Q2FY24. Also, in its recent commentary, management indicated that the company is working to improve profitability,” said Motilal.
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