Zomato Soars with First-Ever Quarterly Profit

Zomato Soars with First-Ever Quarterly Profit: Best Turning Point for the Food Delivery Giant
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Zomato’s Phenomenal Q1 Earnings

In a landmark achievement, Zomato, the renowned food delivery platform, reported its first-ever quarterly profit for FY24. The company’s financial report for Q1 left investors ecstatic as Zomato recorded a net profit of ₹2 crore, a remarkable turnaround from the ₹186 crore loss in the same quarter last year. This extraordinary feat comes as a testimony to Zomato’s relentless pursuit of growth and efficiency in the competitive food delivery industry.

Unravelling the Financial Triumph

It’s Q1 revenue surged to ₹2,416 crore, marking an impressive 70% increase compared to the previous year’s figures. The firm’s operating revenue during the March quarter stood at ₹2,056 crore, showcasing consistent and robust growth trends. This substantial rise in revenue reflects the company’s continued efforts to expand its customer base and enhance its service offerings.

Market Reacts Positively

The stock market celebrated Zomato’s phenomenal performance, leading to a 12% rise in the company’s share price. The Zomato stock opened at ₹89, a notable surge from the previous day’s closing price of ₹86.22. Investors witnessed an even more substantial spike as the share price touched ₹98.39 during early trading, showcasing a remarkable 12% increase. At the time of writing, Zomato shares were trading at ₹96.23, experiencing a rise of ₹10 or 11.61%.

Zomato’s Journey to Success

It’s journey to profitability has been nothing short of remarkable. The company, which made its much-anticipated debut on the stock exchanges in July 2021 at ₹115, had initially offered its shares at ₹76. While the listing had initially witnessed a surge, the stock settled below the listing price in the subsequent months. However, the recent Q1 results have reignited investor optimism and reaffirmed their faith in the company’s long-term potential.

The New-Age Internet Companies: A Rising Trend

It’s success story is part of a broader trend where new-age internet companies are making waves in the stock market. Several prominent players, such as Policybazaar, Nykaa, and Makemytrip, have ventured into the public market through initial public offerings and listed shares on NSE and BSE. This rise of internet-based firms reflects the growing prominence of the digital economy in India.

A Strong Future Outlook

The positive momentum for Zomato is expected to continue as the company foresees adjusted revenue growth of over 40% for the next few years. It’s management is confident in maintaining profitability while pursuing ambitious growth strategies. Industry experts and analysts have responded positively to the Q1 beat and projected a better margin trajectory.

Analysts’ Take

In view of it’s positive future potential and recent achievements, Emkay, a reputable research firm, maintains a favourable outlook. Consequently, Emkay has adjusted its revenue forecasts for FY24-26E, raising them by a notable 13-22%. Given these factors, Emkay upholds its “BUY” recommendation for Zomato, setting a revised target price of ₹110, up from ₹90.

Furthermore, Emkay highlights Zomato’s robust market dominance and exponential growth trajectory as significant drivers for its positive outlook. The company’s expanding user base and innovative strategies catapult it as a frontrunner in the food delivery industry. Building upon its strong brand reputation, Zomato continues to forge strategic partnerships and expand its geographic reach, solidifying its position as a market leader.

Emkay’s revised revenue forecasts reflect this immense potential, projecting substantial revenue growth for the upcoming fiscal years. This optimistic evaluation further reinforces Emkay’s “BUY” recommendation for Zomato, emphasizing the potential for investors to capitalize on the company’s upward trajectory.

With the revised target price set at ₹110, Emkay anticipates favourable returns for those who invest in this dynamic and promising venture.

Conclusion

Zomato’s first-ever quarterly profit is a remarkable milestone in the company’s journey and the broader context of the Indian e-commerce landscape. The company’s unwavering commitment to innovation, customer satisfaction, and growth has culminated in this historic achievement. As Zomato’s business continues to evolve, investors eagerly await the realization of its ambitious growth targets, making Zomato a promising prospect in the dynamic world of the digital economy.

Photo By: Wallpaper Cave

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