Morgan Stanley Elara Capital Gives Buy Call On Zomato Says Stock May Give 44 Percent Return

Zomato Share Price: After the declaration of the results of the fourth quarter of the financial year 2023-24, Morgan Stanley and Elara Capital have increased the target price of the stock of food aggregator and queis commerce company Zomato. Both Elara Capital and Morgan Stanley have advised investors to buy Zomato stock for excellent returns. Elara Capital has said that the company's shares can give 44 percent return to investors from the current level.

Bullish on Zomato

Both Morgan Stanley and Elara Capital have released their research reports regarding Zomato. Morgan Stanley said that Zomato remains important due to the market structure being in its favor in food delivery, fast growing Quick Commerce business and strong balance sheet. In the research report, Morgan Stanley said that due to recent investments, profits may decline in 2024-24 but the company will deliver strong margins in the medium term.

Morgan Stanley increased the target

According to the research report, Zomato has said that the Quis commerce business is near break-even in the next few quarters, that is, it is ready to become profitable. The report said that Zomato's stock is expensive but due to strong growth outlook and better execution support premium multiples, the stock is cheaper than other companies in the restaurant industry and other listed internet companies. Morgan Stanley has advised investors to buy Zomato stock for a target of Rs 235, which is 21 percent more than the current price level.

Stock can give 44 percent return

After the results, Elapa Capital has also increased the target of Zomato's stock price to Rs 285, which is 44 percent more than the current level of the stock. In its research report, Elara Capital said that ESOP charge can distort the picture. But the food business is showing strong growth. Zomato's Qwest Commerce Blikint is showing rapid growth. There is an improvement of 200 basis points in change in product mix, ad revenue and delivery charges take rates. This is why investors have been advised to buy Zomato shares with a target of Rs 280.

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