Zomato share target price: Zomato’s consistent “over-delivery” highlighted yet again in the June quarter (Q1) results on the earnings growth front, has prompted analysts to raise their target prices on the stock. They, now, see up to 49.5 per cent upside in Zomato stock over the next year.

Zomato, they believe, is on a high growth path with its profitability having significant room for expansion.

“Zomato has shown stellar growth in the last few years driven by low penetration. Going ahead, we expect Zomato to deliver strong growth over the next few years as well, driven by order frequency and increase in customer base. Zomato’s path to profitability could be quicker than anticipated with improving contribution margins as the management is not dialing down on growth ambition,” said Nikhil Choudhary and Parth Ghiya of Nuvama Institutional Equities.

The duo has assigned a ‘Buy’ rating to the stock with a higher target price of Rs 285 (from Rs 245).

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Zomato share price surged 19 per cent on the bourses, to a fresh record high of Rs 278.45 per share. Till the time of writing of this report, nearly 258.51 million shares had changed hands on the BSE and NSE. 

By comparison, the benchmark BSE Sensex was down over 650 points (0.8 per cent) at 81,187 level at 10:40 AM.

Zomato, on Thursday, August 1, reported a net profit of Rs 253 crore for Q1FY25, jumping sharply from the Rs 2-crore net profit reported last year. Revenue for the restaurant aggregator rose by nearly 74 per cent year-on-year (Y-o-Y) to Rs 4,206 crore.

It also announced a ‘District’ app with an eye on the broader going-out space, including movies, sports, ticketing, live performances, and staycations.

All verticals of the company saw sequential growth with Food Delivery growing 11.7 per cent, Hyperpure 27.4 per cent, Quick Commerce 22.5 per cent, and Going Out 2.2 per cent.

Within these, the Food Delivery segment’s gross order value (GOV) grew 10 per cent quarter-on-quarter (QoQ) and 27 per cent Y-o-Y to around Rs 9,260 crore. Its average monthly transacting users (MTU) rose 6.8 per cent Q-o-Q to 20.3 million.

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