Shares of Zomato hit a five-month high of Rs 68.10 in intraday trade on Thursday, surging 6% on the BSE. Shares of the food delivery platform company have soared 36% in the past two months on improving operating results. It is trading at its highest level for the current calendar year 2023. The stock has rebounded 68% from its all-time low of Rs 40.55 hit on July 27, 2022.

Zomato reported better-than-expected operating results for the March quarter (Q4FY23) – while its Gross Order Value (GOV) quarter-on-quarter (QoQ) growth was slow, all divisions contributed more than expected.

The company reported narrowing year-over-year and sequential losses in the March quarter (Q4FY23). The food aggregator’s consolidated loss narrowed to Rs 187.6 crore in Q4FY23 from Rs 346.6 crore in Q4FY23 (Q4FY22) The loss was Rs 359.7 crore.

The company’s operating income stood at Rs 2,056 crore in the quarter, up from Rs 1,948.2 crore in the third quarter and Rs 1,211.8 crore a year earlier.

Zomato’s EBITDA loss narrowed to Rs 175 crore in the fourth quarter from Rs 265 crore in the third quarter. However, excluding its fast commerce, the food aggregator turned adjusted EBITDA positive in the March quarter.

Management expects sequential GOV growth in the high single digits in 1QFY24, supported by green shoots from February 2023. Management is guiding for adjusted EBITDA and PAT (including fast commerce) quarters on a consolidated basis over the next four years and plans to achieve this through: 1) profitable growth in the food delivery (FD) business; 2) growth in Blinkit Losses are reduced. It aims to expand FD EBITDAM from the current 1.2% to 4-5% of GOV.

Emkay Global Financial Services maintained its “buy” call on Zomato with a target price of Rs 90 per share.

MOFSL reiterated its “buy” rating on the stock with a target price of Rs 80 per share.