Shares of food delivery app Zomato jumped over 4% on Friday and hit their fresh 52-week high of Rs 150.20 on the NSE on the back of strong December quarter earnings which handsomely beat Street’s estimates. Strong investor interest in the multibagger stock saw more than 7.32 crore shares changing hands on the NSE around 9:30 am.

Following the earnings, HSBC and Nuvama recommended buy views and raised their price targets of the counter while Macquarie appeared unimpressed with a reiteration of its Underperform rating.

Zomato’s third-quarter earnings beat the estimates on the back of robust growth in food delivery and hyperpure businesses. Net profit jumped nearly 4x (283%) quarter-on-quarter (QoQ) to Rs 138 crore. An ET Now poll saw the figure around Rs 36 crore. The company had posted a loss of Rs 347 crore in the last year period. Revenue from operations in the third quarter increased 69% year-on-year to Rs 3,288 crore.

Read more: Zomato Q3 Results: Profit skyrockets 283% QoQ to Rs 138 crore, beats estimates

The stock has delivered returns of 177% over the past 12 months.

Here’s what brokerages recommended:

HSBC: Buy | Target: Rs 163

HSBC has maintained a buy view on Zomato and hiked the target price to Rs 163 from an earlier target of Rs 150. The brokerage said that there were enough reasons to cheer the company’s Q3 results. The food delivery and quick commerce (QC) business performed better than HSBC’s expectations, this brokerage said as it sees normalisation in growth in this segment going forward.The QC business continues to perform both in terms of profitability and growth, HSBC said in its brokerage note.

Macquarie: Underperform | Target: Rs 76

Macquarie has maintained an ‘Underperform’ rating on the counter with a target price of Rs 76. The brokerage finds steady margin improvements and strong quick commerce growth. The food delivery MTU (monthly transacting users) additions were lacklustre at 2%, it said.

Macquarie maintains its guarded stance as shares are pricing in 25-35% 10Y revenue CAGR and a duopoly industry structure in perpetuity in the face of ONDC. The market has rewarded Zomato’s execution over the past year, it said. Stock is now trading at our fundamental blue-sky valuation.

Nuvama: Buy | Target: Rs 180

Nuvama values Zomato using SOTP and maintains a ‘Buy’ with the revised target price of Rs 180 which was up from an earlier target of Rs 140 as we roll forward to Q4FY26. The Blinkit business outshines as the company’s overall profitability surprises, Nuvama note said.

Zomato yet again reported a very strong performance in Q3FY24 with revenue beating estimates. Adjusted EBITDA was also above Nuvama’s estimate with PAT coming in above the expectations.

Management has increased growth guidance from 40% to 50% for the coming quarter due to a strong revenue run rate. In Nuvama’s view, Zomato achieved EBITDA breakeven in Q3FY24 and shall see further improvement in profitability.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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