Buy Zomato, target price Rs 280: JM Financial

JM Financial has a buy call on Zomato with a target price of Rs 280. The current market price of Zomato is Rs 206.65. The time period given by analyst is year when Zomato Ltd. price can reach defined target. Zomato, incorporated in 2010, is a Small Cap company with a market cap of Rs 198874.43 crore, operating in the Services sector.

Zomato's key products/revenue segments include Service Revenue, Royalty Income, Traded Goods for the year ending 31-Mar-2024.

Financials

For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 5,657 crore, up 12.69% from last quarter Total Income of Rs 5,020 crore and up 61.31% from last year same quarter Total Income of Rs 3,507 crore. The company has reported net profit after tax of Rs 59 crore in latest quarter.

The company?s top management includes Mr.Kaushik Dutta, Mr.Deepinder Goyal, Mr.Sanjeev Bikhchandani, Ms.Aparna Popat Ved, Ms.Gunjan Tilak Raj Soni, Ms.Namita Gupta, Ms.Sutapa Banerjee. Company has Deloitte Haskins & Sells as its auditors. As on 31-12-2024, the company has a total of 965 Crore shares outstanding.

Investment Rationale
Zomato is a clear market leader (in GOV/revenue terms) across all its operating business segments. It is also well ahead of the competition on the profitability front across business segments. Moreover, it is the only major hyperlocal delivery company in the country that, at a consolidated level, is currently generating free cash flows, without having compromised on topline growth. This indicates the strong execution capabilities of the management, giving us the confidence that Zomato is the best placed company to fend off emerging competitive threats in QC. JM Financial, therefore, continues to prefer Zomato over Swiggy amongst the two listed hyperlocal delivery players; post the recent correction in both stocks.