Buy Zomato, target price Rs 183: Geojit

Geojit has buy call on Zomato with a target price of Rs 183. The current market price of Zomato Ltd. is Rs 159.95.
Time period given by analyst is one year when Zomato Ltd. price can reach defined target.
Zomato Ltd., incorporated in the year 2010, is a Small Cap company (having a market cap of Rs 122816.29 Crore) operating in Services sector.

Zomato Ltd. key Products/Revenue Segments include Service Revenue, Other Operating Revenue and Royalty Income for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 1161.00 Crore, up 26.66 % from last quarter Total Income of Rs 916.60 Crore and up 159.79 % from last year same quarter Total Income of Rs 446.90 Crore. Company reported net profit after tax of Rs -435.10 Crore in latest quarter.

Investment Rationale
While some of the factors are outside the control of the company i.e. prolonged monsoons, fuel prices, etc, other factors such as continuous investments in Next 500 towns and branding shall drive back-ended benefits in the upcoming quarters. 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. Maintaining a positive outlook, the brokerage reiterates BUY rating on the stock with a revised target price of Rs. 183 based on 23x FY23E P/Sales.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of 30-Sep-2021, while FIIs owned 10.27 per cent, DIIs 4.73 per cent.