Wed Oct 23 10:01:26 UTC 2024: Here are the important points from the news article about Zomato’s stock performance and quarterly results:

1. **Initial Volatility**: Zomato shares initially dropped nearly 5% to a day low of Rs 242.45 due to profit booking after the company’s Q2FY25 results.

2. **Share Recovery**: By 10:22 am, the share price increased to Rs 260.15 on the Bombay Stock Exchange (BSE).

3. **Strong Q2FY25 Results**: The company reported a 389% increase in profit, rising to Rs 176 crore from Rs 36 crore year-over-year. Revenue grew by 68% to Rs 4,799 crore, thanks to better margins in food delivery and rapid expansion of its quick-commerce business, Blinkit.

4. **Mixed Brokerage Insights**: Early sell-offs were influenced by mixed reviews from brokerages, despite a general positive outlook on Zomato’s prospects.

5. **Bullish Target Price Adjustments**:
– **Nuvama**: Raised target price from Rs 285 to Rs 325, maintaining a ‘buy’ rating, citing aggressive expansion of Blinkit’s dark stores.
– **HSBC**: Maintained a ‘buy’ rating with a target of Rs 330, highlighting success in both food delivery and Blinkit.
– **Nomura**: Increased target from Rs 280 to Rs 320, emphasizing Blinkit’s potential and projecting strong growth in gross order value.
– **Motilal Oswal**: Also maintained a ‘buy’ rating with a target price of Rs 330, forecasting improvements in profit margins over the coming years.

6. **Cautious Outlook from Macquarie**: Holding an ‘underperform’ rating with a low target of Rs 100, Macquarie expressed concerns about Blinkit’s unit economics and competition in the quick-commerce space.

7. **Infrastructure Expansion**: Zomato is focused on expanding its infrastructure, aiming to establish 2,000 dark stores by December 2026.

8. **District App Launch**: The launch of Zomato’s District app, consolidating its ‘Going Out’ services, is anticipated soon, which may strengthen its business portfolio.

9. **Overall Market Position**: Despite profitability concerns, Zomato is seen as well-positioned in food delivery and quick-commerce markets, with many brokerages forecasting growth and margin improvement.

10. **Investment Advisory Disclaimer**: The article concludes with a disclaimer encouraging investors to consult financial advisors before making investment decisions.

In summary, while Zomato’s shares experienced initial volatility post-earnings, strong financial results, guidance from brokerages, and strategic expansions underscore a positive long-term outlook, despite some cautious perspectives on profitability and competition.

Read More