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Shares of Indian food-delivery platform Zomato Ltd. were the best performers amid a sea of red in Asia on Friday after a 125-fold surge in quarterly profit triggered rating upgrades by several brokerages.
Shares surged as much as 19% to a record, with at least 18 brokerages raising their price targets.
The company’s net profit surged to 2.5 billion rupees ($30 million) in the June quarter, from 20 million a year ago, the firm based in Gurugram, near New Delhi, said in a statement on Thursday.
Zomato, which gets about half of its revenue from the food delivery business, has been witnessing sharp improvement in its quick-commerce service.
The firm acquired Blinkit in 2022 and has been expanding this service line and now aims to reach 2,000 small warehouses by the end of 2026, versus its initial aim to have 1,000 stores this fiscal ending in March 2025.
The company’s latest growth guidance for quick commerce is “more aggressive,” compared with a total count of quick commerce outlets at 1,500 stores in India across players, according to Jefferies Financial Group Inc. analysts including Vivek Maheswari.
The rally in Zomato’s shares also pushed shares of some other Indian e-commerce firms higher. Info Edge (India) Ltd., which owns about 14% stake in Zomato, added 5.8% while Nykaa’s operator FSN E-Commerce Ventures Pvt. Ltd. gained 4.2%.
--With assistance from Sankalp Phartiyal.
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