Buy Zomato; target of Rs 110: Motilal Oswal

Buy

Motilal Oswal's research report on Zomato

Zomato deliveAred an excellent 1QFY24 performance, as it turned profitable and reported strong revenues of INR24.1b (up 17.5% QoQ), much ahead of our estimates of 9.9% QoQ growth and a PAT loss. Revenue growth was led by the food delivery business (up 17% QoQ). While Blinkit was muted (+5% QoQ) due to disruptions in April-May, it should reverse in 2Q (20% QoQ growth guidance). The management has guided for strong 40%/60%+ growth for Zomato (consol)/Blinkit over the next few years, which surprised us on the upside.

Outlook

We remain positive on the long-term growth opportunity for Zomato and do not expect competition to intensify further despite the entry of ONDC in the space. Our DCF-based valuation of INR110 suggests a 27% upside from the current price. We reiterate our BUY rating on the stock.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Zomato - 04 -08 - 2023 - moti