Zomato Shares Dip 6% Post Q4 Results

Zomato Shares Dip 6% Post Q4 Results: The share price of food delivery giant Zomato fell by 6% today (May 14) following the release of its Q4 results. Despite the decline, brokerages remain positive about the stock’s future.

Zomato reported a consolidated net profit of ₹175 crore for the fourth quarter of FY24, a significant turnaround from a loss of ₹188 crore in the same period last year. The net profit also marked a 27% increase from ₹138 crore posted in the December quarter. Furthermore, Zomato’s revenue from operations surged 73% year-on-year to ₹3,562 crore in Q4FY24.

Emkay Global Financial Services maintained its ‘Buy’ rating on Zomato, setting a target price of ₹230 per share. Although the brokerage retained FY26 earnings per share (EPS) estimates, it lowered FY25 EPS estimates by about 20% due to potential slower profitability for Blinkit, Zomato’s quick-commerce subsidiary.

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Nuvama Institutional Equities also upheld its ‘Buy’ rating, raising the target price to ₹245 per share from the previous ₹180. They valued Zomato’s food delivery segment at $10 billion and Blinkit at $13 billion, attributing the increase to Blinkit’s faster-than-expected growth. Nuvama noted that while the aggressive addition of dark stores may impact Blinkit’s margins in the next two quarters, higher margins are expected by FY26.

Similarly, Elara Capital boosted its target price for Zomato to ₹280 per share from ₹250, maintaining a ‘Buy’ rating. CLSA also retained its ‘Buy’ rating and raised the target price to ₹248 per share.

Analysts generally maintain a bullish outlook on Zomato, highlighting strong revenue growth and improved profitability despite the recent dip in share price.