Following the release of its Q4 results, Zomato’s stock experienced a 6% dip in early trading on Tuesday, settling at ₹182.10 per share on the BSE. However, the company’s performance in the fourth quarter of FY24 is a testament to its resilience, reporting a consolidated net profit of ₹175 crore, a stark contrast to the ₹188 crore loss in the same period the previous year. This represents a significant 27% increase from the December quarter’s reported ₹138 crore.

Zomato Shares

Zomato’s operating revenue in Q4FY24 climbed by 73% YoY to ₹3,562 crore from ₹2,056 crore. Across B2C businesses, gross order value (GOV) increased in the March quarter, reaching ₹13,536 crore, or 51% YoY. The company reported an operating EBITDA of ₹86 crore, an improvement over the ₹226 crore loss it incurred in the same period the previous year. In March 2024, Zomato’s Blinkit, a quick commerce division, reached operational EBITDA break-even. Analysts’ optimistic outlook for Zomato shares was upheld, with some increasing their target price due to the company’s sustained outperformance over Blinkit.

The following is what analysts had to say about Zomato’s Q4 earnings and share price:

Emkay Global Financial Services 

Zomato, a division of Emkay Global Financial Services, reported consistent operating results. Revenue exceeded Emkay Global’s projections, but the margin miss was caused by higher-than-anticipated ESOP costs. The brokerage firm has largely maintained its estimates for FY26E earnings per share (EPS) but reduced FY25E EPS by about 20% to account for Blinkit’s slower profitability due to its aggressive store expansion plan and higher ESOP costs. 

Nuvama Institutional Equities

By the end of FY25, Blinkit hopes to increase the number of dark stores from 525 in Q4 of FY24 to 1000. Nuvama Institutional Equities stated that although this will have an effect on short-term profitability, it will solidify Blinkit’s position as the undisputed leader in rapid commerce. Using SOTP, it assigns a $10 billion value to food delivery on Zomato and a $13 billion value to Blinkit. The upgrade resulted from Blinkit’s value rising due to its unexpectedly rapid growth and obvious leadership in rapid commerce. 

Also Read: A Delhi court summons Zomato for the “false practice” of delivering food from “iconic restaurants.”

Elara Capital

Zomato’s strong moat in the food industry, which could see it posted an adjusted EBITDA CAGR of 47% in FY24–26E, and superior execution for Blinkit (market leadership), aided by better customer experience compared to peers (on-time delivery, better product assortments), are the reasons Elara Capital said it still favours Zomato. 

Due to stronger growth for Blinkit/Hyperpure, it increased the consolidated revenue estimates for FY25E and FY26E by 22% and 33%, respectively. However, due to lower EBITDA for Blinkit (whose focus is expansion) and higher ESOP charges, its consolidated earnings upgrade for FY25E and FY26E is only 7% and 3%, respectively. 

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