By Zomato’s share price experienced a remarkable surge of 11.5% on Friday, August 2, as the company hit a fresh all-time high of ₹261 per share in morning trade. This sharp increase in the stock price comes on the heels of the company’s better-than-expected financial results for the April-June quarter of FY25, reflecting robust growth across its key business verticals.
The stock opened at ₹244 on the BSE, already 5% higher than the previous close. As trading continued, the momentum carried Zomato’s shares to new heights, driven by investor confidence in the company’s strong earnings report.
Zomato reported a consolidated net profit of ₹253 crore for Q1FY25, a staggering leap from the mere ₹2 crore recorded in the same period last year. This significant improvement in profitability was primarily attributed to a higher gross order value (GOV) across its core segments, including food delivery, quick commerce, and the growing “going-out” vertical.
The company also reported consolidated revenue of ₹4,442 crore for the quarter, marking a substantial increase from ₹2,597 crore in Q1FY24.
The strong financial performance has not only boosted Zomato’s share price but also reaffirmed its position as a leader in the food delivery and quick commerce space. Over the past year, Zomato’s share price has surged by an impressive 170%, a testament to the company’s resilience and ability to capitalize on market opportunities.
Despite the sharp gains, several brokerage firms remain bullish on Zomato’s stock, with many seeing further upside potential. The positive sentiment is fueled by the company’s continued growth trajectory and its ability to deliver strong financial results consistently.
Nuvama Wealth, a prominent brokerage firm, has maintained its buy rating on Zomato’s stock, raising its target price from ₹245 to ₹285. Nuvama highlighted that Zomato’s performance exceeded expectations on multiple fronts, with management guiding for over 20% growth in the short term in the food delivery segment. The company also has ambitious plans to expand its quick commerce business, with a target to increase Blinkit’s dark store count from 639 in Q1FY25 to 2,000 by the end of 2026.
Similarly, Motilal Oswal Financial Services, also reiterated its buy call on Zomato, setting a target price of ₹300, which implies a potential upside of 28% from the current levels. Motilal Oswal noted that Zomato’s food delivery business remains stable, and Blinkit offers a generational opportunity to disrupt traditional industries like retail, grocery, and e-commerce.
The optimism from brokerage firms reflects a broader market sentiment that Zomato is well-positioned to continue its growth journey, despite the challenges posed by the competitive landscape. The company’s ability to innovate and adapt to changing consumer preferences has been a key driver of its success.
Zomato’s management has also been proactive in addressing investor concerns and setting clear growth targets. The company’s focus on improving operational efficiency and expanding its service offerings has resonated well with investors, further boosting confidence in the stock.
As Zomato continues to expand its footprint in the food delivery and quick commerce sectors, the company’s strong financial performance in Q1FY25 is a promising indicator of what lies ahead. The robust growth in both revenue and profit underscores Zomato’s ability to scale its operations effectively while maintaining profitability.
The market will closely watch how Zomato executes its growth strategy, particularly in expanding its quick commerce vertical and further strengthening its position in the food delivery market. With ambitious targets and a solid foundation, Zomato appears well-equipped to navigate the challenges and opportunities in the evolving digital economy.
As trading concluded on Thursday, Zomato’s stock closed 2% higher at ₹234.10, setting the stage for a promising trajectory in the coming quarters. The positive momentum is expected to continue as the company leverages its strong market position and delivers on its growth commitments.
