Zomato Soars to 52-Week High Amidst Bullish Q2 Performance

In Monday’s trading session, Zomato Ltd witnessed a remarkable surge, with its shares climbing 5 percent to reach a 52-week high. The online food delivery giant exceeded market expectations in Q2, marking a significant turnaround for the food delivery segment after two consecutive quarters of sluggish growth. Analysts pointed out that the revenue surge was primarily driven by Blinkit, emphasizing that the adjusted Ebitda margin as a percentage of gross order value (GOV) for food delivery remained stable.

Zomato remains optimistic about achieving a breakeven point in Blinkit during Q1FY25, despite the rapid addition of new stores, according to analysts. While opinions vary among analysts regarding the company’s future, several express positivity about Zomato’s prospects, albeit with differing target prices.

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The stock experienced a substantial increase of 4.76 percent, reaching a fresh one-year high of Rs 121.95. Year-to-date, Zomato’s stock has surged by an impressive 102 percent. Nuvama Institutional Equities emphasized Zomato’s unwavering focus on growth, stating, “Zomato’s consistent growth across all business segments instills confidence in its ability to maintain a leading position in food delivery and further capture market share in quick commerce.”

Furthermore, analysts noted that Zomato’s revenue growth surpassed expectations, attributing it to the robust performance of all its businesses. They revised their revenue growth estimates upward, indicating the management’s pursuit of higher-than-anticipated growth. However, there is a slight adjustment in profitability expectations, reflecting the company’s strategic investments aimed at driving sustained growth.

By 11:23 am, Zomato’s shares were trading 2.06 percent higher at ₹118.90, highlighting the market’s positive response to the company’s bullish Q2 performance.