ICICI Securities Maintains Rating On Zomato, Delhivery & India Mart Ahead Of Quarterly Results
Brokerage estimates Zomato’s food delivery to grow 4 QoQ in Q2FY24 given a high base of 11.4 per cent
The forthcoming festive season will witness the quarterly results of listed firms. With the current volatility in the Indian stock market, the quarterly numbers are pivot in determining stock prices.
“The trend of online growing faster than offline may have likely sustained in Q2FY24E. This is evident from the trends in ‘consumer foodservice’ and ‘fashion and lifestyle’ categories, where both Zomato and Nykaa are likely to post higher growth than their offline peers,’’ as per ICICI Securities.
ICICI Securities estimates Zomato’s food delivery to grow 4 percent quarter-on-quarter QoQ in Q2FY24 given a high base of 11.4 per cent, QoQ GOV (gross order value) growth in Q1FY24.
It estimates food AOV (average order value) to remain flattish sequentially and expect food ordering contribution margin to expand by 60bps QoQ led by take rate improvements.
Zomato’s wholly owned subsidiary, Blinkit is expected to grow 30.9 per cent QoQ and Hyperpure business (B2B) to grow 7 per cent QoQ in Q2FY24E.
‘‘Overall, we estimate adjusted revenue growth of 10.1 per cent QoQ and overall adjusted EBITDA margin to improve to 3.4 per cent as a proportion of adjusted revenue. We maintain BUY on the stock with target price of Rs 160,” stated ICICI Securities.
On Friday, Zomato closed on Rs 111 or 1.15 per cent higher. The Stock has delivered 83 per cent returns year to date (YTD) outperforming all the sectoral indices returns.
The Delhivery quarterly numbers are also in line to be released. The company’s express parcel shipment volume is estimated to be flattish given the festive season has been delayed this year.
Overall, the revenue is estimated to grow 2 per cent QoQ and adjusted EBITDA to improve to Rs 68 milllion. With the rating kept at BUY on the stock, the target price is Rs 500.
On Friday, Delhivery closed on Rs 426.30 or 0.95 per cent lower. The Stock has delivered 28.4 per cent YTD outperforming the Nifty 50 index returns.
India Mart Q2FY24 revenue is estimated to grow 26.8 per cent YoY (8.2 per cent QoQ) led by 25.2 per cent (YoY) growth in collections in Q2FY24.
“We believe subscriber addition may be 5,000 this quarter, an improvement from Q1FY24 but still below the company’s desired range of 7,000-8,000 per quarter. We estimate EBITDA margin to improve by 87bps QoQ (+35bps YoY) in Q2FY24E,’’ sated ICICI Securities.
Overall, we estimate EBITDA to grow 28.4 per cent YoY and PAT to grow 19.5 per cent YoY in Q2FY24. We maintain ‘BUY’ on the stock with the target price of Rs 3,500, added ICICI Securities.
In the last trading session, India Mart closed on Rs 2825 or 0.36 per cent lower. The Stock has delivered 30 per cent returns outperforming the Nifty 50 index returns of 8 per cent YTD.
