Zomato share price target: Zomato shares fall 6% post-Q4 results. Is it the right time to buy the stock?

Zomato share price NSE, Zomato Q4 results: Zomato shares on Tuesday, May 14 fell over six per cent on Dalal Street, a day after the online food delivery services firm reported its March quarter results. The Zomato stock fell as much as 6.27 per cent to the day's low of Rs 182.1 on NSE. The counter closed at Rs 187.6, down 3.45 per cent on NSE.

Zomato shares: Should you buy, sell or hold Zomato share post-Q4 results?

Four brokerages, Jefferies, CLSA, Nomura, and Citi have maintained a 'buy' call each on the Zomato. 

Jefferies has raised the target to Rs 230 from Rs 205, CLSA has increased the target to Rs 248 from Rs 227, Citi has raised the target to Rs 235 from Rs 220 and Nomura has raised the target by Rs 45 to Rs 225. 

JPMorgan and Morgan Stanley have maintained an 'overweight' rating on Zomato shares. While JPMorgan has raised the target to Rs 208 from Rs 175, Morgan Stanley has raised the target to Rs 235 from Rs 180.

In contrast, Macquarie, on the other side, has maintained an 'underperform' rating on the stock with a target of Rs 96.

Additionally, Bernstein has maintained an 'outperform' rating on Zomato. The brokerage has raised the target to Rs 230 from Rs 200.

Buy Zomato shares on dips says Anil Singhvi

The market wizard suggested investors chase Zomato shares with a 'buy on dips' strategy at the current juncture amid a host of upgrades by brokerages after the release of the food delivery company's quarterly numbers.

Zomato Q4 results

For the January-March quarter, the company posted a consolidated net profit of Rs 175 crore, when compared to a loss of Rs 188 crore during the same period last year. The net profit figure is in-line with Zee Business research estimates. Sequentially, the desk estimated the profit to rise 26.8 per cent. The company's PAT stood at Rs138 crore in the December-ended quarter.

The revenue from operations at the new-age company also climbed sharply by 73 per cent during the reporting quarter to Rs 3,562 crore as against Rs 2,056 crore logged in Q4FY23. The desk estimated a lower revenue for the period under review of Rs 3,350 crore.

EBITDA or earnings before interest, taxes, depreciation, and amortization also logged a stupendous gain, nevertheless came in lower than estimates at Rs 86 crore in comparison to Rs 226 crore loss reported in the corresponding period of the previous year. Analysts expected EBITDA profit to come in at Rs 120 crore. EBITDA margin, also came in lower as against estimates of 3.6 per cent at 2.41 per cent.

Amid heightened competition from rival players, the company's expenses zoomed around 50 per cent given the high spend towards marketing and sales promotion. Contribution margin, nevertheless, soared to 7.5 per cent as against 5.8 per cent a year ago after the company started levying a platform fee on all orders. 

The gross order value or GOV- the overall value of all orders placed in the company's main food delivery business logged 28 per cent growth. Blinkit, the company's quick commerce arm posted a jump of 97 per cent in GOV during the quarter under review. Read more on Zomato Q4 results

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