According to brokerage firm Emkay Global, online food delivery company Zomato Shares can earn about 50 percent of its investors in the next one year. According to Emkay, the business of India’s online food delivery market can grow up to 7 times in the next decade, which will directly benefit the big companies in this sector like Zomato.
Emkay said that there are only 2 big companies in the food delivery market right now. With Zomato increasing its market size through its strong brand name, close to 50 per cent market share, Blinkit and Hyperpure, and making the company profitable, its net profit is likely to see annual growth of around 40 per cent in the next years. Huh.
With this, Emkay Global has started covering Zomato’s shares with buy rating and has fixed a target price of Rs 90 for it with a time period of next one year. This is almost 50 percent more than the current market price of the company.
Emkay has given this target price at a time when the shares of Zomato have fallen by about 56.28 per cent so far this year. However, today i.e. on Thursday, 29 September, after the Emkay report, Zomato’s shares saw strength and closed at Rs 61.80, up 6.46 per cent on the NSE.
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The brokerage said that it has not looked into any aspect of Blinkit on the value side due to the intense competition and no specific timeline to turn profits at the level of unit economics. It also said that the company had earlier set an investment target of $400 million for the next two years, which has now been reduced to $320 million. This will reduce the expenses of the company and help it come out of losses.
Let us tell you that Zomato has set a target to come out of the loss by the second quarter of the next financial year. The company’s Chief Financial Officer (CFO) Akshat Goyal said in an interaction with analysts in August that the company’s cash flow is already positive and now their focus is to touch breakeven.
In the first quarter of the current financial year, the company’s operating loss came down to Rs 150 crore, he said. “The next target is Zomato breakeven and we think that target is close,” Goyal said.
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