Zomato’s stock has delivered incredible returns, jumping 118% this year and over 130% in the past year. Experts now predict a further 45% upside for this stock. Here’s why they are optimistic:
Strong Q2 Results Boost Confidence
In Q2 FY25, Zomato reported a massive 389% jump in net profit to ₹176 crore, compared to ₹36 crore last year. Revenue surged 68.5% to ₹4,799 crore. However, net profit dropped 30.43% from Q1 FY25 due to a dip in cash reserves after acquiring Paytm’s ticketing business.
Zomato’s core B2C segment recorded a 55% yearly growth in gross order value (GOV) and a 14% rise from the previous quarter. Additionally, its quick-commerce arm, Blinkit, showed strong performance, with a 20% sequential growth in Q2 FY25, despite stiff competition.
Analysts’ Take Post-Q2
Axis Securities remains bullish on Zomato, citing strong brand recognition and rising demand for its B2C and quick-commerce businesses. Analysts believe Zomato will experience exponential growth from FY25 to FY26 and have raised their price target accordingly.
Elara Securities anticipates even faster growth in the second half of FY25, driven by the festive season. On profitability, they project EBITDA margins to improve to 4-5% of GOV by FY27. Higher revenues from the “Going Out” business, boosted by the Paytm acquisition, are also expected to drive earnings upward.
Technical Indicators Suggest Further Upside
Bharat Gala, COO of Equity Broking at Ventura Securities, notes that Zomato has been in an uptrend since June, reaching a high of ₹298 in September. After a brief correction, the stock hit a low of ₹240 in November, showing a solid rebound since.
Technical indicators like KST, Aroon Up/Down, and Demand Index are all pointing to positive momentum. Recently, Zomato saw a breakout on the weekly chart, supported by strong volumes. The stock is now trading above its moving average.
- Target Price: ₹400
- Support Levels: ₹260, ₹254, and ₹248
- Stop Loss: ₹238
Experts suggest buying on dips and accumulating shares at support levels to capitalize on the potential upside.
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