Deepinder Goyal mints Rs 1,600 crore in few hours as Zomato shares rally post Q1 show

Deepinder Goyal, the founder and CEO of Zomato Ltd made a killing on Friday as the new-age food delivery platform delivered a strong set of numbers in the June 2024 quarter. The stock was flying higher during the session, bucking the weakness on Dalal Street, minting big fortunes for the investors.

Shares of Zomato surged nearly 19 per cent to new-all time highs of Rs 278.45 on Friday as its total market capitalization of the company hit the 2.46 lakh crore mark. The stock had settled at Rs 234.10 in the previous trading session with a total valuation of 2.06 lakh crore for the day. The company added nearly Rs 40,000 crore in its mcap.

Amid this stellar rise, Zomato's chief executive and Shark Tank-fame Deepinder Goyal, who owned 36,94,71,500 equity shares or 4.19 per cent stake in the company as of June 30, 2024, added more than 1,638 crore in his kitty. His stake in the company stood at Rs 10,288 crore at day's high.

Zomato is a professionally managed company, with no promoter. Among other key shareholders, Info Edge (India), which also owns the platform Naukri, added about 5,300 crore as its total ownership in Zomato jumped to Rs 33,265 crore as it held 1,19,46,87,095 equity shares by the end of June 2024 quarter.

Zomato on Thursday reported a multifold rise in its net profit in the June 2024 quarter, which came in at Rs 253 crore, zooming more than 12,650 per cent on a year-on-year (YoY) basis. The food delivery aggregator's revenue from operations increased 75 per cent YoY to Rs 4,206 crore in the first quarter of the ongoing financial year.

Zomato's Ebitda for the first quarter of the ongoing fiscal year stood at Rs 177 crore, which was an Ebitda loss of Rs 48 crore. Similarly, margins for the Q1FY25 stood at 4.21 per cent. Gross order value (GOV) of B2C business grew 53 per cent YoY to Rs 15,455 crore for the quarter.

Overseas brokerage firm CLSA has given the highest target price on the stock so far as it believes that the results were above all estimates. "Blinkit saw profitability improve despite a rapid acceleration in dark stores & MTCs grew 18.8 per cent QoQ despite a 1.3 per cent QoQ AOV increase," CLSA said with a 'buy' rating and a revised target price of Rs 350 on the stock.

Zomato’s food delivery GOV growth came in at a solid 27 per cent YoY and beat estimates. Food delivery CM of 7.3 per cent was muted, though operating leverage ensured sequential EBITDA margin expansion. Blinkit’s GOV grew a solid 130 per cent YoY improvement and loss reduction, said Kotak Institutional Equities.

"Guidance of achieving a 2,000 store count by end-2026 is aggressive and shows the company’s confidence in the model. We upgrade revenue estimates, but bake in lower near-term profitability, resulting in a 7-9 per cent FY2025-27E EPS cut. Strong growth and steady margins in food delivery warrant lower WACC, resulting in a revised SoTP-based fair value of Rs 270," it said.

Topline beat was led by food delivery (FD) and Hyperpure segments, whereas, Ebitda beat was driven by Going-out, which off-set a miss on FD and Blinkit (QC) profits. Adjusted EBITDA margin was below estimates in both these segments due to higher delivery costs, said JM Financial.

"In our opinion, Zomato remains on track to deliver over 20 per cent GOV growth in the FD business over the medium term and achieve 4-5 per cent adjusted ebitda margin guidance over the next few quarters. We raise earnings by 2-15 per cent over FY25-27 and raise our September 2025 target price to Rs 260," JM added with a 'buy' rating.

Other global brokerage firms including UBS, Citi and Goldman Sachs have maintained a 'buy' rating on Zomato with target prices in the range of Rs 260-280 apiece. Bernstein and Morgan Stanley have a 'outperform' tag for the company. On the contrary, Macquarie pegs the stock to hit Rs 100 mark, with an 'underperform' rating.