Shares of Zomato Ltd surged nearly 26 per cent in the last five sessions. The stock of the food delivery company hit a lifetime low of Rs 50.05 on NSE on May 12, 2022. However, after reaching its lows, Zomato shares have been steadily moving north. The stock price of Zomato has seen a sharp jump following promising guidance from the company management after the announcement of Q4 results. The stock gained over 48 per cent in the past one month as the brokerage upgraded its target price after the March quarter earnings.
Zomato’s consolidated net loss for the quarter ended March rose to Rs 360 crore as compared to Rs 134.2 crore in the same period last year. Revenue from operations stood at Rs 1,211.8 crore, up 75.01 per cent as compared to Rs 692.4 crore in the same quarter last year.
According to experts, Zomato has announced that it has around Rs 12,200 crore of unrestricted cash and their capital requirement is limited. Furthermore, during the commentary, the company has promised to control its operating costs and improve its margins in the coming quarters. He said that this has turned in favor of the stock and now it has started moving northwards. However, he added that those who have this stock in their portfolio should continue to hold the stock while new investors should avoid taking any new positions in the counter.
Zomato reported significant sequential improvement in all key operational and financial metrics in the fourth quarter of FY22. Even more impressive, analysts said, were the disclosures and management’s willingness to address concerns down the road via a shareholder letter as well as a post-results conference call.
“We are bullish on Zomato’s long-term growth prospects in the hyper local delivery space as it is well positioned to benefit from strong industry tailwinds such as improved technology penetration and growing income share of digitally native Millennials or GenZ. We maintain a positive outlook on the Company’s other hyper-local ecosystem investments (i.e. beyond core food delivery) as they can lead to bundled offerings that will not only help improve customer engagement, retention and order frequency but also Will also run operational synergies. JM Financial report stated.
Since the start of the year, stocks were under pressure and fell nearly 65 per cent as global equity markets tumbled amid expected tightening by global central banks.
According to analysts at Jefferies, “Zomato is aiming for accelerated growth, despite its focus on loss reduction, which is in line with long-term shareholder expectation. 1QFY23 losses should be significant. ,
Broking house Morgan Stanley has placed ‘overweight’ rating on the stock with a target of Rs 135 per share. Research firm UBS has maintained a ‘buy’ rating on the stock with a target price of Rs 130 per share.
The views and investment suggestions of experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decision.
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