Geojit has given Buy recommendation for Zomato with a target price of Rs. 183 in its research report issued on Nov 17, 2021

Geojit’s research report on Zomato

Zomato Limited is a leading food delivery aggregator in India and has presence in 23 other countries abroad. The company had revenues of nearly Rs. 1,994cr as of FY21. Driven by rapid increase in the number online gross order values of Indian food delivery, revenue jumped 140.4% YoY in Q2FY22. However, EBITDA loss widened to Rs. 536cr (vs. Rs. 122cr loss in Q2FY21) on higher opex. Adj. PAT also fell to Rs. 435cr loss (vs. Rs. 138cr loss in Q2FY21). The mainstay food ordering and delivery business is expected to drive shareholder value creation going forward. The management believes that the food delivery market in India is still nascent, and there is an opportunity to grow the market at least 10x over the next few years.

Outlook

Maintaining a positive outlook, we reiterate our BUY rating on the stock with a target price of Rs. 183 based on 23x FY23E P/Sales.

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