Zomato Q3 results: Target price cut post muted Q3; long-term outlook intact

Zomato's long-term growth story remains intact as it is a play on the growing food services industry in India as well as increasing adoption of digital commerce

Analysts have cut target price on Zomato shares after the food delivery company posted a muted December quarter (Q3FY22). At best, they expect the shares to deliver about 74.64 per cent returns in a year, hitting Rs 155-mark during the period. Earlier, the highest 1-year target price on Zomato was Rs 185.

"After a strong Q2FY22, an underwhelming gross order value (GOV) in Q3 will raise questions on India opportunity. Earnings release remains opaque, lacks substance, and describes only selective aspects of the business. Following a weak Q3, we reduce price target to Rs 120," said Vivek Maheshwari, equity analyst