Results season is in full swing and various Brokerages are coming up with targets based on various factors, viz, future operations, corporate governance, and others.
Listed below is one such large-cap stock that one should add to their watchlist for a potential upside of more than 40 percent:
Zomato Limited
With a market capitalization of Rs 1.39 lakh crores, the stocks of Zomato Limited started their trading session on Friday at Rs 156.95 and currently trade at Rs 157.25, gaining approximately 1.50 percent compared to its previous close of Rs 154.85 apiece.
Having a glance at the recent financials of the company, the prime business indicators, viz, operating revenues as well as after-tax profits saw a breakeven in numbers a few quarters back and the recent movements QoQ has been observed as a booming phase.
The operating revenues, on a consolidated basis, jumped from Rs 2,848 crores during Q2FY24 to Rs 3,288 crores during Q3FY24, and the bottom-line figures, during the same horizon, rose drastically from Rs 36 crores to Rs 138 crores. Along with the same, the company enjoys a debt-free status implying no short-term interest obligations on the company.
Keeping a positive outlook for the company, CLSA, a capital markets and investment group focused on alternative investment, asset management, etc, gave a target of Rs 227 on the company’s stock indicating a potential upside of 44 percent compared to the prevailing stock price level.
The rationale behind the international brokerage giving such a recommendation pertains to its belief that the company, though being a small one, is an increasingly vital component of the profit pool. Moreover, the recent Q3 results of the E-retail company are indicative of a trajectory toward consistent profitability, further enhancing investor confidence.
As per the recent presentations, the company is set to focus on expanding its footprint for Blinkit in larger cities. In addition, the company expects various factors such as monthly Transacting Customer (MTC) growth, increase in platform fee, ad income, and commission revenue to be the future growth driver.
Keeping a purview of one year, the company’s stock has delivered multibagger returns of nearly 206 percent for its stakeholders. The same means that if someone had invested Rs 1 lakh into the company’s stock a year ago, it would have converted to Rs 3.06 lakhs.
The latest shareholding data of the company portrays the Foreign Institutional Investors (FIIs) holding a considerable stake of 54.88 percent followed by the Public (retail) Investors holding a 27.98 percent stake in the company.
Zomato Limited is an online food service platform for searching and discovering restaurants, ordering food delivery, booking a table, and making payments while dining out at restaurants. The company’s segments include the Quicl commerce business, Hyperpure supplies, and others.
Written by Amit Madnani
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