Zomato share price falls nearly 2% today. Should you buy or avoid?

Zomato shares dipped nearly 2% in early trade on Tuesday, marking a continued pullback after a strong rally earlier this year. The food delivery platform’s stock was down 1.59%, trading at Rs 249.90 on the Bombay Stock Exchange (BSE) by midday. Over the past month, shares have dropped 8.56%, though they remain up nearly 100% for the year.
In its recent Q2 results for FY25, Zomato reported a solid 68.5% jump in revenue to Rs 4,799 crore, led by gains in its core food delivery segment and fast-growing quick-commerce division, Blinkit. The company’s net profit surged by 389% year-over-year, reaching Rs 176 crore compared to Rs 36 crore in the previous year.
While Zomato’s main food delivery operations saw a steady 30% revenue increase, the Blinkit and Hyperpure segments posted stronger growth, with revenues up by 129% and 97.7%, respectively. Despite expansion costs, the company reported an improved EBITDA margin of 4.7% for the quarter, up from 1.7% a year ago.
Zomato’s gross order value (GOV) grew 55% YoY to Rs 17,670 crore, supported by strong order frequency and new customer acquisitions. CEO Deepinder Goyal has expressed confidence in further growth, expecting GOV to exceed Rs 1,000 crore in the near future as Zomato adds new services like entertainment ticketing.
Geojit Financial Services has issued a “Buy” rating on Zomato, setting a target price of Rs 284.
“Zomato’s management expects the going-out segment’s gross order value (GOV) to grow more than 3x moving forward, reaching upwards of Rs. 1,000 crore from Rs 323 crore in FY24. There is further potential for growth contingent upon the company’s ability to introduce additional use cases to the platform, including shopping and staycations.”
“Zomato’s management expects the going-out segment’s gross order value (GOV) to grow more than 3x moving forward, reaching upwards of Rs. 1,000cr from Rs. 323cr in FY24. There is further potential for growth contingent upon the company’s ability to introduce additional use cases to the platform, including shopping and staycations,” the brokerage firm added.
Therefore, it seems that in the current environment, Zomato shares present an option for investors seeking exposure to India’s expanding online food and quick-commerce sectors.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)