In early trade on Tuesday, Zomato's stock took a 6% plunge following the announcement of its Q4 results. With the company reporting a consolidated net profit of ₹175 crore,

A significant turnaround from the loss of ₹188 crore in the same period last year, investors are left wondering whether this dip presents a buying opportunity.

Zomato's revenue from operations for Q4FY24 saw an impressive 73% increase to ₹3,562 crore compared to ₹2,056 crore in the previous year. Additionally, its Gross Order Value (GOV) surged by 51% year-on-year to ₹13,536 crore, indicating robust growth across its B2C businesses.

The company also showcased operational strength, posting an EBITDA of ₹86 crore, a notable improvement from the previous year's loss of ₹226 crore.

Furthermore, its quick commerce arm, Blinkit, achieved operational EBITDA break-even in March 2024, adding to the positive outlook.

Analysts have largely maintained their bullish stance on Zomato, with some even revising their target prices upwards.

Emkay Global Financial Services highlighted Zomato's steady operational performance, albeit with a margin miss due to higher than expected ESOP costs. Despite this, they maintain a 'Buy' rating with a target price of ₹230 per share.

Nuvama Institutional Equities sees Blinkit's expansion plans as key to cementing Zomato's leadership in the quick commerce sector.

They raised their target price to ₹245 per share, citing Blinkit's faster-than-expected growth and market dominance.

Elara Capital favors Zomato's strong position in the food business, projecting an adjusted EBITDA CAGR of 47% in FY24-26E.

They raised their target price to ₹280 per share, emphasizing Zomato's superior execution and growth prospects.

While Zomato's shares saw a decline in early trading, closing at ₹184.10 apiece on the BSE, the positive performance indicators and analyst recommendations suggest that this dip could indeed be an opportunity for investors eyeing long-term growth in the food delivery sector.

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