Zomato losses extend: Should you buy, sell or hold the stock?

Stocks

Zomato reported an EBITDA loss of Rs 449.7 crore in Q4 FY22, as compared to a loss of Rs 153.5 crore in the corresponding period last year.

Zomato

Zomato

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Zomato share price added 5 percent in the early trade on May 24, a day after the company announced its March quarter earnings.

The food aggregator on May 23 reported a net loss of Rs 359 crore in the fourth quarter of fiscal year 2021-22. The company’s revenue, during the same period, climbed to Rs 1,211.8 crore.

The net loss has nearly tripled over the year-ago period, when it stood at Rs 134.2 crore, though the revenue has surged 75 percent as against Rs 692.4 crore in Q4FY21.

Zomato reported an EBITDA loss of Rs 449.7 crore in Q4 FY22, as compared to a loss of Rs 153.5 crore in the corresponding period last year.

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Here is what brokerages have to say about stock and the company post March quarter earnings:

Morgan Stanley

Broking house Morgan Stanley has kept ‘overweight’ rating on the stock with a target at Rs 135 per share.

The Q4 numbers were in line with improved transparency on segment disclosures.

The company gave better outlook for Q1 and a tighter framework around capital allocation. The company is moving in right direction, needs consistent execution to meet high expectations, reported CNBC-TV18.

UBS

Research firm UBS has maintained ‘buy’ rating on the stock with a target price of Rs 130 per share.

The Q4FY22 was a healthy quarter, despite reopening headwinds, while key numbers were broadly in line, slightly ahead of estimates.

The company’s disclosures have also improved this quarter, which is a positive.

UBS believes growth drivers continue to remain strong and will look out for commentary on the demand outlook for FY23-24.

The research firm will also look out for views on potential acquisition and consolidation of Blinkit, reported CNBC-TV18.

At 9:17am, Zomato was quoting at Rs 59.85, up Rs 2.85, or 5 percent on the BSE.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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