Catch the latest trending news on Zomato’s viral share price surge, with a 170% gain in a year. Discover why brokerages remain bullish on the stock despite recent hikes and explore what drives its impressive Q1FY25 earnings performance.

Zomato’s Q1 Result Sparks Share Price Hike

The Zomato stock has become a standout performer in the stock market, with the share price showing an extraordinary 170% surge over the past year. This impressive gain has continued with a remarkable 19% hike in the share price following the company’s Q1FY25 results. On August 2, Zomato’s share price hit an all-time high of ₹278.45 on the BSE, opening 5% higher at ₹244 apiece.

Understanding the Q1FY25 Earnings Report

Zomato’s strong quarterly performance is a key factor in the recent share price hike. The company’s consolidated net profit for Q1FY25 soared to ₹253 crore, compared to just ₹2 crore in the same quarter a year ago. This impressive profitability was driven by a higher gross order value across its food delivery, quick commerce, and going-out verticals. Additionally, consolidated revenue for the quarter reached ₹4,442 crore, up from ₹2,597 crore a year earlier.

Brokerages Bullish on Zomato Stock

Despite the recent surge in Zomato’s share price, many brokerage firms remain optimistic about the stock’s future potential. Nuvama Wealth has maintained a buy call on Zomato stock and raised its target price to ₹285 from ₹245, citing the company’s consistent delivery of strong growth and improved profitability. The management has guided for 20%+ growth in food delivery and plans to increase Blinkit’s dark store count from 639 in Q1FY25 to 2,000 by the end of CY26.

Motilal Oswal Financial Services also supports a buy call, setting a target price of ₹300, which implies a 28% upside potential. The firm highlights the stability of Zomato’s food delivery business and the significant opportunity Blinkit offers in disrupting retail, grocery, and e-commerce sectors.

Kotak Institutional Equities, too, maintains a buy call with a revised SoTP-based fair value of ₹270, up from ₹225 earlier. Kotak has upgraded Zomato’s FY25-27 revenue estimates by nearly 4-5%, attributed to higher food delivery and Blinkit revenues. Although the EPS estimates were cut by 7-9% due to lower near-term profitability for Blinkit, Kotak remains optimistic about the company’s sharp execution across verticals.

Cautionary Notes from Analysts

While the stock is attractive for long-term investors, some technical analysts caution about potential overbought conditions. Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, notes that Zomato’s stock is trading significantly above key moving averages, indicating a possible pullback. Patel advises against initiating new long positions at the current elevated levels and suggests considering profit booking to lock in gains.

Is Zomato Stock Still a Buy?

Zomato’s stellar performance in the stock market has been driven by robust earnings and strategic growth plans. Despite the recent price surge, brokerage firms continue to view the stock as a buy, based on strong growth prospects and promising market opportunities. However, investors should be mindful of the potential for a price correction due to overbought conditions. For those already invested, booking profits might be a prudent strategy in the near term.