Zomato : Up 62% From July’s Low
Zomato : Up 62% From July’s Low, Can Q2 Results Boost This New-age Stock Further : The stock of Zomato has climbed 62 per cent from its 52-week low of Rs 40.55. Despite this, the stock is down 61 per cent from its 52-week high. Zomato, whose shares have gained 62 per cent from July lows, may report a reduction in losses in the September quarter on a sequential and year-on-year basis. Analysts, who saw Zomato’s shares rise up to 91 per cent, say higher contribution margins in the food delivery business and better revenue mix due to the advertising business will lead to a gradual reduction in EBITDA losses.
The stock of Zomato has climbed 62 per cent from its 52-week low of Rs 40.55. Despite this, the stock is down 61 per cent from its 52-week high.
Zomato : Up 62% From July’s Low
Zomato, whose shares have gained 62 per cent from July lows, may report a reduction in losses in the September quarter on a sequential and year-on-year basis. Analysts, who saw Zomato’s shares rise up to 91 per cent, say higher contribution margins in the food delivery business and better revenue mix due to the advertising business will lead to a gradual reduction in EBITDA losses.
Investors will watch for any comments on order and GOV (gross order value) growth, Blinkit’s unit economics and synergies with the user base; and the delivery fleets of Zomato and Blinkit, analysts said.
Zomato : Up 62% From July’s Low : Kotak Institutional Equities expects Zomato to post a loss of Rs 149.20 crore in the September quarter, as against a loss of Rs 185.70 crore in June and Rs 435.10 crore in the year-ago quarter. It expects sales of the online food aggregator to grow 48.2 per cent year-on-year to Rs 1,517.90 crore from Rs 1,024.20 crore in the same quarter a year ago.
Kotak is building in 7 per cent sequential revenue growth due to higher food delivery orders, higher rates and recovery in the advertising business for the standalone business. Zomato stock has risen 62 per cent from its 52-week low of Rs 40.55 on July 27. Despite this, the stock is down 61 per cent from its 52-week high, due to the twin impact of corrections and concerns in technology stocks globally. around the Blinkit acquisition, Edelweiss Securities said in a note.
Zomato : Up 62% From July’s Low : Zomato completed the acquisition of Blinkit in August, and Edelweiss said it will be important for Zomato to achieve synergies from the integration of the delivery fleet. This brokerage is seeing a core loss of Rs 165.20 crore. Its quarterly revenue grew 50 per cent to Rs 1,538. “We anticipate 8.8 percent QoQ revenue growth on the back of 6.5 percent QoQ GOV growth. We are building 6.5 percent QoQ order growth, flat AOV and an additional 8 million in monthly transacting users. Contribution margins anticipate GOV to expand marginally to 3.2 per cent from 2.8 per cent in Q1FY23. This is due to better take rates and lower delivery and discount expenses,” Edelweiss said.
AOV stands for Average Order Value.
JM Financial sees a loss of Rs 151.40 crore for Zomato. The brokerage expects the company to report improved profitability, with adjusted EBITDA loss down 210 basis points sequentially and 21.8 per cent year-on-year. It said the contribution margin may improve to 3.1 per cent from 2.8 per cent in the June quarter. Batliwala and Karni Securities have estimated a loss of Rs 106.10 crore for Zomato in the second quarter. Its revenue has increased by 55.1 percent to Rs 1,588 crore.
analyst target
JM Financial gets Zomato for Rs 125; The fair price of Kotak Zomato watches Rs 90. Edelweiss considers Zomato at Rs.80. ICICIDirect, which started coverage on the stock on September 28, sees it at Rs 90. Target does not factor in any price increases from Blinkit, given the uncertain timeline, unit economics turnaround and intense competitive intensity. Emkay has also kept the share price at Rs 90. Batliwala and Karni Securities have given ‘Hold’ rating on the stock. Against Tuesday’s closing price of Rs 65.60 on the BSE, there is a sign of up to 91 percent in the target.