Share price of Zomato turned volatile on Friday after it reported loss in Q3 FY23 that divided analysts. The stock slipped 2.02 per cent to close at ₹53.30 on the BSE after sliding 7.4 per cent to ₹50.35.
Zomato, on Thursday, reported a loss of ₹347 crore in the quarter ending December 31, 2022, as against a loss of ₹251 crore reported in the previous quarter. This loss was against an operational revenue of ₹1,948 crore in Q3 FY23 (₹1,661 crore) and ₹1,112 crore in operational revenue in Q3 FY22.
Morgan Stanley maintained its Overweight stance on the stock with a target price of ₹82, while another foreign broking firm Goldman Sachs was even more bullish, as it set a target price of ₹100
According to CLSA, profitability metrics is on the right track for Zomato, but growth parameters remain slow. It reiterated its Buy with a target of ₹70.
Domestic brokerage JM Financial was the most bullish among them, with a target price of ₹126. “Zomato, once again, surprised positively on the profitability front in Q3. Consol. Adj. EBITDA loss stood at ₹265 crore versus JMFL expected loss of ₹280 crore. The beat on profitability was driven by better-than-expected consol. revenue (6 per cent ahead of JMFe) and contribution margins in both Food Delivery (5.1 per cent versus 4.6 per cent JMFe) as well as Quick Commerce (-4.5 per cent versus -5.5 per cent JMFe) segments.
For Nomura, it was “Reduce” with a target price of ₹50, as gross order value growth “disappointed”.