Zomato's Q1 results enhance investor appetite as share jumps 8%. Should you buy?

economictimes.indiatimes.com:

Zomato’s first-ever quarterly profit triggered sharp interest in the stock, with investors rushing to lap up shares as soon as the markets opened on Friday. Nearly 5.25 crore shares changed hands in the opening trade on the NSE, catapulting the stock price by over 8% to its 52-week high of Rs 93.65. While the June quarter earnings were announced during the fag of Thursday's trading session, the stock responded immediately and jumped 2%.

Following the results, Jefferies and Nuvama recommended a 'Buy', giving a fresh impetus to the stock. The food delivery platform reported a consolidated net profit of Rs 2 crore for the quarter ended June 2023 against a loss of Rs 186 crore in the corresponding quarter of the last financial year. The company reported a loss of Rs 189 crore in the quarter ended March.

The revenue from operations for the reporting quarter stood at Rs 2,416 crore which was up nearly 71% against Rs 1,414 crore reported by the company in the year-ago period. Here's what brokerages recommended on the stock:Jefferies: Buy | Target: Rs: 130We sharply raise Ebitda and revised price target to Rs 130. The brokerage has a 'Buy' rating.

A positive net profit in the April-June quarter was way earlier than the guidance and this puts to rest all the concerns around Zomato's ability to make 'respectable' profits. Calling it a «journey of dramatic twists and turns since the IPO», Zomato achieved a key milestone of adjusted Ebitda and consolidated PAT positive. The brokerage also lauded the company's management while vouching for its credibility and its execution prowess, which is particularly positive for Blinkit which most investors ascribe zero (or negative) value.Nuvama: Buy | Target: Rs 110Zomato reported strong Q1FY24