Global brokerage firm UBS on Monday increased the price target for Zomato’s shares to Rs 320 apiece, from Rs 260 earlier, while maintaining its ‘buy’ recommendation. It sees a 2-3 per cent jump in Zomato’s gross merchandise value (GMV) and a 20-30 per cent surge in quick commerce.
Following this, Zomato’s shares jumped 6 per cent to Rs 280 apiece on the BSE. However, later, the gains were tapered on profit-booking during the day. As of 1405 IST, Zomato’s shares were 0.1 per cent up at Rs 264.8 apiece on the BSE.
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A day ahead of the festival of Raksha Bandhan, Blinkit’s GMV hit an all-time high. At its peak, Zomato’s subsidiary Blinkit saw 693 rakhis per minute orders, according to Blinkit CEO Albinder Dhindsa.
“We increase our GMV estimates for food delivery (+2-3 per cent) and quick commerce (+20-30 per cent) for FY26-28e following the strong Q1 and solid guidance. Our adj EBITDA estimates for the next 1-2 years are up only slightly as investments in building supply for quick commerce will likely result in a more modest margin trajectory,” UBS said in its note while giving the ‘buy’ call for Zomato’s shares.
EBITDA stands for earnings before interest, tax, depreciation and amortisation.
In the past one month, Zomato’s shares have risen 23.7 per cent, on better-than-expected Q1 results.
In the June 2024 quarter, Zomato’s consolidated net profit skyrocketed to Rs 253 crore, compared with Rs 2 crore in the year-ago period. Its revenue from operations during April-June 2024 stood at Rs 4,206 crore, which is 74 per cent higher as compared with Rs 2,416 crore a year ago.
Its food and grocery delivery services have contributed substantially to its performance. The company’s food delivery income jumped to Rs 321 crore in Q1 FY25, compared Rs 186 crore a year ago.
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