Zomato Share Price Surges 14%, Approaching Rs 100! Further Upside Expected

In a spectacular turn of events, Zomato's shares have skyrocketed by an impressive 14.11%, hitting a remarkable one-year high of Rs 98.39 on the BSE. This sudden increase in share value follows the company's thrilling announcement of making a profit of Rs 2 crore after taxes for the quarter. Investors are thrilled about the development.

JM Financial is confident that the positive trend will keep going in the future. They think that market values the food delivery business, but there is even more potential to be unlocked in Blinkit, which is a very promising part of company. Despite already witnessing a 35% rise since the March quarter results, Zomato's shares seem poised for further growth.

The food delivery GOV of Zomato saw an 11% sequential increase, marking a significant rebound from two quarters of stagnation. The management's projections of over 40% adjusted revenue growth in both FY24 and FY25, along with a focus on Ebitda profitability in the near future, are certainly bolstering investor confidence. Additionally, Zomato aims to achieve adjusted EBITDA profitability in all three of its businesses by FY25.

Motilal Oswal Securities expects Zomato to achieve positive reported Ebitda by the March quarter, projecting a 5% Ebitda margin in FY25. With a valuation based on a DCF methodology and assumptions of 4% terminal growth rate and a 12.5% cost of capital, the business seems poised for continued success.

As Jefferies values the stock at Rs 130 and Nomura India points to seasonal factors contributing to Zomato's growth, the company's core Food Delivery and Q-commerce businesses are expected to experience robust growth and margin improvement over FY24 and FY25.

The company's first profitability milestone has indeed caught the market's attention, and Nuvama suggests a target of Rs 110 for Zomato's stock as the focus shifts towards FCF generation.

With such impressive performance and ambitious plans, Zomato's growth trajectory appears bright as it draws closer to the coveted Rs 100 milestone. Investors are excitedly observing, hoping the food delivery giant's progress journey continues with promising opportunities in the future.