The share price of Zomato has achieved its IPO price of 76, marking a new 52-week high.
Shares of Zomato, an online food aggregator, started the trading day on BSE at 74.80 per and ranged in price from 76 to 73.69. Shares of the firm have gained about 48% since March 28 and are now trading at a level around their IPO price of 76.
According to industry experts, Zomato’s stock price has fluctuated wildly over the last two years. However, there is some good news, as the company’s stock price has returned to its initial public offering (IPO) level, suggesting a possible recovery. Zomato’s outstanding FY23 performance has been a major factor in the stock’s recent upswing.
The company’s losses for the quarter ending in March decreased to 188.20 crores from 346.60 crores in the previous quarter and from 188.20 crores in the same quarter a year before. In addition, the company’s sales jumped by 70% in Q4FY23, from 1,211.80 crores to 2,056 crores.
The company reported positive adjusted EBITDA (and PAT) in the March quarter excluding quick commerce and stated that it planned to achieve positive adjusted EBITDA (and PAT) including quick commerce within the next four quarters.
Brokerages have maintained a favorable perspective on the meal delivery aggregator on the strength of generally excellent earnings reports.
Morgan Stanley, a major worldwide stockbroker, is bullish on the firm, assigning it a “overweight” rating and setting its target price for the stock at $85 (a 12% premium over its current market price). Zomato’s stock has been given a ‘overweight’ recommendation by the brokerage because of the company’s optimistic near-term growth prospects and the success of its recent app releases.
How do experts weigh in?
ITI Growth Opportunities Fund Chief Investment Officer and Managing Partner Mohit Gulati while speaking of Zomato said, despite my many criticisms of Zomato, I cannot deny that the firm and its stock have been riding high for the previous two quarters. It seems to me that they have found their rhythm again. From the perspective of the firms that have been battered down and faced challenging questions about their sales and profitability, I believe that Zomato is the first technology company to really do this.
He further added, The integration of Blinkit into Zomato, which I think was the deciding factor in the deal, boosts AOV, TTM, and GR across the board. Order momentum and delivery fleet optimization seem to be working in their favor, therefore I expect to see that route to positive EBITDA and profit after tax (PAT) materialize. At 76, it seems like a fair price to enter at the moment. Zomato’s future purchases shouldn’t go against the grain but rather contribute to the company’s goals of sustainability and growth.
According to a new report, Zomato and Blinkit are planning to take their services to the next level by using generative AI.
Research Director of Ventura Securities, Vinit Bolinjkar
Zomato’s food division had positive adjusted EBITDA (excluding ESOPs) in Q2, Q3, and Q4 of FY23. As a consequence of these remarkable accomplishments, the adjusted EBITDA loss for FY23 was just 10 crore, a substantial increase from the 670 crore loss recorded in FY22. Management’s confidence in the company’s ability to maintain positive EBITDA in the future bodes well for its financial success.
Zomato expects its rapid commerce division to generate a positive adj EBITDA in FY24, in addition to its food division. This target is especially impressive since it comes on the heels of a 562 crore loss in FY23. Zomato hopes to strengthen its position and win the trust of investors by displaying a dedication to profitability and expansion.
With so many positives, it’s no surprise that Zomato has a generally excellent reputation.
The company’s stock price may rise in response to this brighter outlook, providing investors with even more financial gain.