Zomato shares surge 5% ahead of Q2 results; here're analyst views

Shares of Zomato Ltd climbed nearly 5 per cent in Friday's trade ahead of teh food aggregator's September quarter earnings. The stock rose 4.83 per cent to hit a high of Rs 112.70 on BSE, with a total of 28.55 lakh Zomato shares changing hands so far compared with a two-week average of 34.63 lakh shares.

JM Financial in its preview note expected Zomato's revenue growth to be higher than its gross order value or (GOV) growth at 19.1 per cent amid an improvement in take-rates. The domestic brokerage is expecting the contribution margin to come in at 6.8 per cent of average order value (AOV) compared with 6.4 per cent in Q1, with the assumption that the improvement will be purely take-rate driven. Adjusted Ebitda margin expansion, it said, could be limited to 30 basis points sequentially, thanks to salary hikes in July.

"In BlinkIt, we expect very strong sequential GOV growth of 17 epr cent led by robust increase in order. We also expect take-rates to improve to 19.3 per cent from 17.9 per cent in Q1, driven by ad income - that in turn should help the company achieve contribution level profitability for the very first time," it said while anticipaing Ebitda loss narrowing down to Rs 6 crore against Rs 48 crore in the June quarter.

ICICI Securities in a recent report expected Zomato's quick commerce business could turn contribution positive (full quarter basis) by Q2FY24 and profitable at the adjusted Ebitda level by June quarter of FY25.

"In our view, the quick commerce business could improve adjusted Ebitda as percentage of GOV, by 620 bps over the next four quarters," it said.

Zomato may report 57 per cent YoY jump in net sales at Rs 2,607 crore, Kotak Institutional Equities said. This brokerage expects Ebitda at Rs 9.9 crore while it sees Ebitda margins at 0.4 per cent.

"The company may turn to black on a YoY basis and report a net profit of Rs 42.6 crore, it said adding that the growth would be driven by 28 per cent YoY jump in food delivery revenues, 103 per cent YoY growth in Hyperpure revenues and 205 per cent YoY growth in Blinkit revenues.

"We bake in 10 bps sequentially higher contribution margin of 6.5 per cent in the food delivery business. Higher profitability of the food delivery business and lower losses in Hyperpure and Blinkit businesses drive an increase in adjusted Ebitda," it added.

B&K Securities forecast Zomato's sales at Rs 2,803 crore, up 69 per cent YoY while it sees net profit of Rs 71 crore.

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