Nomura has reiterated its ‘Buy’ rating on Zomato (Eternal), cutting its target price to ₹280 from ₹290, after a mixed set of Q4FY25 results. While revenue growth remained strong, near-term profitability in quick commerce (Q/C) came under pressure, prompting a modest revision in estimates.
The company reported a YoY revenue growth of 63.8% to ₹5,833 crore, while net profit fell 77.7% YoY to ₹39 crore, due to operating challenges and base effects. EBITDA dropped 16.3% to ₹72 crore, and margins narrowed to 1.2% from 2.4% a year ago.
Nomura noted that profitability was impacted by lower GOV (gross order value) in Q4, which was affected by fewer trading days and the delisting of nearly 19,000 restaurants from the platform for quality reasons. However, the brokerage highlighted that Zomato is not burning cash at the EBITDA level, and remains well-positioned to navigate growing competition in the Q/C space.
Nomura continues to see long-term value in Zomato’s diversified platform model, disciplined cost approach, and brand strength. It believes that despite short-term pressure, the structural growth story in online food delivery and quick commerce remains intact.
Disclaimer: The above views are those of the brokerage and not the publication. Investors are advised to consult a certified financial advisor before making investment decisions.
