Zomato Outlook: Online food delivery platform Zomato’s shares have seen tremendous growth since its listing in the stock market. Shares of Zomato are trading with a jump of 77 percent compared to the IPO price. In such a situation, questions are arising in the minds of investors whether it can be invested at this height or not? According to analysts at global brokerage and research firm Bernstein, it may continue to rise further. Based on the quarterly earnings of Zomato, the brokerage firm believes that the prices of Zomato can jump up to 27 percent right now. Zomato’s losses increased in the June 2021 quarter but its performance was excellent in terms of Gross Order Value, Number of Orders, Active Restaurant Partners and Active Delivery Partners. The company’s cumulative orders crossed the 100 crore mark and 10 per cent of it came in just three months.
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Shares jump 5% after financial results
Shares of Zomato have jumped 5 per cent since the announcement of the financial results for the June 2021 quarter and are now trading at Rs 135 per share. However, there was an increase in the company’s net loss in the June quarter. Zomato had a loss of Rs 360 crore in the June 2021 quarter, while there was a loss of Rs 99.8 crore in the June 2020 quarter. However, in April-June 2021, the company’s gross order value increased by 37 per cent on a quarterly basis to Rs 4540 crore and adjusted revenue growth by 26 per cent to Rs 1160 crore.
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Target price of Rs 170 for Zomato
Analysts from the global research firm have valued Zomato’s food delivery franchise at 8.0x NTM (Next Twelve Month) while the global/regional peer range is around 4.5x-11 EV/sales (enterprise value/sales). Zomato Pro Business is at 32x EV/EBITDA while B2B Supply business is at 8.0x Sales. Bernstein’s analysts have given outperform rating to Zomato and have set a target of Rs 170 per share for this.
(Article: Kshitij Bhargava)
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