Zomato share price was off to a flyer on Friday hitting a new 52-week high as the company made its first-ever consolidated net profit during the quarter that ended June.
What Happened: The food delivery giant’s net profits stood at ₹2 crore for the June quarter as against a loss of ₹186 crore in the same quarter last year. The company’s revenue from operations went up 71% to ₹2,416 crore, as compared to the ₹1,414 crore in the year-ago period.
Analyst Reactions: Brokerages across the board remained bullish on the stock after the company’s stellar showing in the June quarter. Jefferies maintained its ‘buy’ rating on the stock with a price target of ₹130. The research firm said that Q1 casts all doubts about the company’s ability to generate profits.
HSBC also maintained its ‘buy’ rating for the stock with a price target of ₹102. The analysts said that the company expects to probability to improve further company. The research firm also added that the food delivery business is expected to grow sustainably in the long term.
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UBS maintained its ‘buy’ rating on the stock with a target price of ₹90. The firm said that Q1 earnings beat expectations as demand recovered. The firm added that Zomato’s strong revenue growth was supported by the food delivery business.
JP Morgan also maintained its ‘overweight’ rating for the stock with a target price of ₹100. The global research firm noted that Zomato achieved adjusted EBITDA and PAT breakeven ahead of guidance.
However, global brokerage firm Nomura holds a different view. The firm maintained its ‘reduce’ rating on the stock with a target price of ₹60. The firm said that while the company’s Q1 results beat expectations sustaining growth will be difficult in the long term.
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Price Action: Zomato’s share price was up 6.47% to ₹92.15 at market open on Friday.
