52-week high alert: This food delivery aggregator shares rose as improved margin expansion!
The management projects profitability improvement even in challenging macroeconomic conditions.
Shares of online food delivery aggregator Zomato have jumped 15.52 per cent in the last nine trading days, while on Monday, the stock rose 3 per cent to hit a 52-week high of Rs 80 on BSE.
On May 19, Zomato Ltd reported its Q4 results, and since then the shares have gained 26 per cent. In Q4 FY23, Zomato reported that its earnings before interest, taxes, depreciation, and amortization (EBITDA) had turned positive at Rs 28 crore, excluding the quick commerce business, for the quarter ended March 31.
According to Jefferies, Zomato's profitability will improve on the back of margin expansion in the food sector and a reduction in losses at Blinkit. The management projects profitability improvement even in challenging macroeconomic conditions. Jefferies estimates that its gross order value could grow at an impressive pace in the June 2023 quarter. Chris Wood of Jefferies has kept it in his long-term portfolio with a 4 per cent weightage which created a positive sentiment for Zomato.
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The company has two core business-to-customer (B2C) offerings - Food delivery and Dining-out, in addition to its business-to-business (B2B) offering Hyperpure. Another important part of its business is Zomato Pro, its customer loyalty program which encompasses both food delivery and dining out. Each of its B2C, as well as B2B offerings, helps increase the value of its platform for its customers, enabling it to further attract new customers and deepen engagement with existing customers.