Zomato share price surged 6 percent in the early trade on November 11 a day after the company announced its September quarter earnings. Zomato, the online food delivery platform, on November 10 announced its July-September quarter results for the financial year 2021-22.
The company reported a net loss of Rs 430 crore on a consolidated basis compared to a loss of Rs 230 crore in the same period of last year, an increase of 87 percent.
It had reported a net loss of Rs 356 crore in the previous quarter when it declared its maiden results as a public limited company. On a sequential basis, the loss for the company increased by 21 percent.
The online food aggregator recorded consolidated revenues of Rs 1,024 crore for the quarter compared to Rs 426 crore in the same period last year.
The revenues increased by a robust 140 percent. Compared to the previous quarter, the revenues are up by 21 percent from Rs 844 crore.
Adjusted revenues for the quarter came in at Rs 1,420 crore, a 22.6 percent growth q-o-q and 144.9 percent y-o-y growth.
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Here is what brokerages have to say about the stock and the company post the September quarter earnings:
Macquarie
The research house has kept an outperform rating on the stock with a target price of Rs 183 citing more clarity in long-term strategy and cash usage after Q2 results.
Goldman Sachs
Goldman Sachs has maintained a buy call and has raised the target price on the stock to Rs 185. The broking firm raised FY22 gross order value (GOV)/revenue estimates by 13%/9%. It feels that the market is likely to reward growth over profitability for foreseeable future.
It forecast a 51% FY21-25 CAGR for Zomato’s GOV (46% earlier) and the company is well-positioned to capture accelerated shift to online in food delivery.
Morgan Stanley
Morgan Stanley has kept an equal-weight rating on the stock with target at Rs 140. GOV of $721 million (+19.2% QoQ, +158.2% YoY) against Morgan Stanley’s estimate of $590 million. The contribution margin in food delivery dropped to 1.2 percent, while net loss of USD 57 million is in-line with estimate.
Jefferies
Jefferies has maintained buy call with a target at Rs 170.
The Q2 MTU & GOV are a big positive, of course, comes at the cost of profitability. The management intends to exit non-core, with focus shifting from buy to build.
Jefferies raises revenue & loss estimates.
At 09:16 hrs Zomato was quoting at Rs 142.90, up Rs 7.15, or 5.27 percent on the BSE.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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