Zomato (ZOM) Stocks Drop 6% Post-Q4 Results: Is Now the Time to Invest?

• Zomato’s share price fell by 6% in early trade on Tuesday following the announcement of its Q4 results.
• The food delivery platform reported a consolidated net profit of ₹175 crore in Q4FY24, a significant turnaround from the loss of ₹188 crore in the same period a year ago.
• Analysts maintain a bullish view on Zomato shares, with some raising their target price due to the continued outperformance of Blinkit, Zomato’s quick commerce arm.

Zomato’s Q4 results show a strong financial performance, leading to a surge in share prices despite initial dip. Analysts remain optimistic about the company’s future prospects.

Zomato’s Q4 Financial Performance

Zomato’s shares declined by as much as 5.98% to ₹182.10 apiece on the BSE after the announcement of its Q4 results. However, the company reported a consolidated net profit of ₹175 crore in the fourth quarter of FY24, marking a significant improvement from a loss of ₹188 crore in the same period a year ago. The net profit grew 27% from ₹138 crore posted in the December quarter.

Revenue and Gross Order Value Growth

Zomato’s revenue from operations in Q4FY24 increased 73% to ₹3,562 crore from ₹2,056 crore, YoY. The Gross Order Value (GOV) for the March quarter grew across B2C businesses, rising to 51% YoY to ₹13,536 crore. At the operating level, the company posted an EBITDA of ₹86 crore, an improvement from the loss of ₹226 crore incurred during the same period last year.

Analysts’ Views on Zomato’s Performance

Analysts have maintained their bullish view on Zomato shares with some raising their target price on the stock led by the continued outperformance of Blinkit, Zomato’s quick commerce arm. Brokerage firms like Emkay Global Financial Services, Nuvama Institutional Equities, and Elara Capital have all maintained a ‘Buy’ rating on Zomato shares.

Conclusion

Zomato’s Q4 results indicate a strong financial performance, with a significant turnaround in net profit and substantial growth in revenue and GOV. Despite the initial dip in share prices, analysts remain optimistic about the company’s future prospects, particularly due to the strong performance of Blinkit. This could potentially lead to further growth in Zomato’s share prices in the future.