Bank of America (BofA) has reiterated its ‘Buy’ rating on Zomato, assigning a target price of ₹375, implying a 62% upside from the current market price (CMP) of ₹230.70. The brokerage remains optimistic about Zomato’s long-term growth potential despite near-term challenges.
Key Highlights:
- Q3FY25 Results:
- Zomato’s Q3 results missed consensus estimates on EBITDA and EPS.
- Food revenue growth at 17% was below expectations.
- Blinkit Performance:
- Blinkit reported an adjusted EBITDA loss of ₹103 crore, which the management attributed to faster expansion.
- BofA expects Blinkit losses to persist for the next 1-2 quarters but is optimistic about 100%+ GOV growth in FY25 and FY26.
- Outlook:
- Despite short-term losses, Zomato’s management remains focused on growth.
- The company is betting on strong execution and market share expansion in the quick commerce segment.
CMP and Target:
- Current Market Price (CMP): ₹230.70
- Target Price (TP): ₹375
- Upside Potential: 62%
Conclusion:
BofA maintains a bullish stance on Zomato, highlighting its growth potential in the food delivery and quick commerce segments. Investors with a long-term horizon may find the current valuations attractive.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to consult their financial advisors before making any investment decisions.
