UBS Increases Zomato’s Share Price Target to Rs 320, Retains ‘Buy’ Rating
UBS Increases Zomato’s Share Price Target to Rs 320, Retains ‘Buy’ Rating
UBS, a global brokerage firm, has raised its price target for Zomato’s shares from Rs 260 to Rs 320 while keeping its ‘buy’ rating. The firm anticipates a 2-3% increase in Zomato’s gross merchandise value (GMV) and a 20-30% rise in quick commerce.
As a result, Zomato’s share price rose by 6% to Rs 280 on the BSE, though the gains were later reduced due to profit-taking. By 1405 IST, the shares were trading at Rs 264.8, up by 0.1% on the BSE.
Ahead of Raksha Bandhan, Blinkit, a zomato subsidiary, achieved a record GMV, with CEO Albinder Dhindsa reporting 693 rakhi orders per minute at peak times.
UBS noted, “We are increasing our GMV forecasts for food delivery (+2-3%) and quick commerce (+20-30%) for FY26-28, reflecting a strong Q1 and positive guidance. Our adjusted EBITDA estimates for the next 1-2 years have only slightly increased due to expected investments in quick commerce, which will likely moderate margin growth.”
In the june 2024 quarter, Zomato’s consolidated net profit surged to Rs 253 crore from Rs 2 crore in the same period last year. Revenue from operations for April-June 2024 reached Rs 4,206 crore, a 74% increase from Rs 2,416 crore a year earlier.
The company’s food and grocery delivery services have significantly boosted its performance, with food delivery revenue rising to Rs 321 crore in Q1 FY25, up from Rs 186 crore the previous year.
UBS, a global brokerage firm, has raised its price target for Zomato’s shares from Rs 260 to Rs 320 while keeping its ‘buy’ rating. The firm anticipates a 2-3% increase in Zomato’s gross merchandise value (GMV) and a 20-30% rise in quick commerce.
As a result, Zomato’s share price rose by 6% to Rs 280 on the BSE, though the gains were later reduced due to profit-taking. By 1405 IST, the shares were trading at Rs 264.8, up by 0.1% on the BSE.
Ahead of Raksha Bandhan, Blinkit, a zomato subsidiary, achieved a record GMV, with CEO Albinder Dhindsa reporting 693 rakhi orders per minute at peak times.
UBS noted, “We are increasing our GMV forecasts for food delivery (+2-3%) and quick commerce (+20-30%) for FY26-28, reflecting a strong Q1 and positive guidance. Our adjusted EBITDA estimates for the next 1-2 years have only slightly increased due to expected investments in quick commerce, which will likely moderate margin growth.”
In the june 2024 quarter, Zomato’s consolidated net profit surged to Rs 253 crore from Rs 2 crore in the same period last year. Revenue from operations for April-June 2024 reached Rs 4,206 crore, a 74% increase from Rs 2,416 crore a year earlier.
The company’s food and grocery delivery services have significantly boosted its performance, with food delivery revenue rising to Rs 321 crore in Q1 FY25, up from Rs 186 crore the previous year.