Zomato shares: 84% upside possible? Food delivery startup surprises the Street with better-than-expected Q3 results

Zomato shares recovered uch of their initial losses on Friday, a day after the food delivery startup reported a better-than-expected set of earnings. Brokerages have lined up targets as high as Rs 100 per share for Zomato — envisaging upside potential of 83.8 per cent in the stock from its closing price on Thursday.

Zomato shares recovered much of their initial losses on Friday, a day after the food delivery company reported a better-than-expected set of Q3 results. | Image: Reuters

Zomato share price today: The stock of Zomato recovered much of their initial losses on Friday, a day after the food delivery firm reported a set of financial results for the quarter ended December 2022 that exceeded analysts' estimates. Zomato shares were left with a cut of 0.6 per cent at Rs 54.1 apiece in mid-morning deals on BSE, having declined by as much as Rs 4.1 or 7.4 per cent to Rs 50.4 apiece earlier in the day.

Brokerages have mixed views on the stock with targets as high as Rs 100 per share — upside potential of 83.8 per cent from Thursday's closing price.

Zomato Q3 results

Zomato reported a net loss of Rs 346.6 crore for the October-December period as against a net loss of Rs 251 crore for the previous three months. Its revenue increased 17.3 per cent to Rs 1,948.2 crore for the three-month period on a sequential basis, according to a regulatory filing.

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Both topline and bottomline were better than analysts' estimates. According to Zee Business research, Zomato's quarterly loss was estimated at Rs 381 crore and revenue at Rs 1,831 crore.

The company's EBITDA loss came in at Rs 366 crore for the quarter ended December 2022, as against the Zee Business estimate of Rs 393 crore.

What brokerages make of Zomato shares after the food delivery startup's Q3 results

Brokerage	Rating	Target price
Morgan Stanley	Overweight	Rs 82
Nomura	Reduce	Rs 50
CLSA	Buy	Rs 70
JPMorgan	Overweight	Reduced to Rs 100 from Rs 120
Jefferies	Buy	Rs 100

Editor's take: Anil Singhvi says one should not form a view on a new-age stock basis performance in one quarter

Zee Business Managing Editor Anil Singhvi remains skeptical on new-age stocks. "One should not trust results of just one quarter for new-age companies... Instead, observe the numbers for at least 1-2 quarters to form a view," he said.

Earlier, he said that investors holding new-age stocks such as Paytm should avoid exiting as "just about any level".

ALSO READ: Paytm shares cross Rs 700 level after four months; is this an opportunity?

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