Zomato Ltd's Q3 financial report shows strong growth and profitability, but non-operating income raises concerns

Zomato Ltd, a leading IT software company, has recently announced its financial results for the quarter ending December 2023. The company has shown an outstanding performance with a score of 34, which is a significant improvement from the previous score of 25 in the last three months.

One of the major highlights of the financial report is the growth in Profit After Tax (PAT) which has increased by 211.1% to Rs 138.00 crore compared to the average PAT of the previous four quarters which was at Rs -124.20 crore. This shows a very positive trend in the near term for the company.

Another positive aspect is the growth in Net Sales, which has been consistently increasing in the last five quarters and has reached its highest at Rs 3,288.00 crore. This is a growth of 41.9% compared to the average Net Sales of the previous four quarters which was at Rs 2,317.05 crore. The company's Operating Profit (PBDIT) has also shown a positive trend, reaching its highest at Rs 51.00 crore and growing each quarter in the last five quarters.

Zomato Ltd has also shown an improvement in its Operating Profit Margin, which has reached its highest at 1.55%. This indicates that the company's efficiency has improved. The Profit Before Tax less Other Income (PBT) has also shown a positive trend, reaching its highest at Rs -95.00 crore and growing each quarter in the last five quarters.

The company's Earnings per Share (EPS) has also increased to its highest at Rs 0.16 in the last five quarters, showing an increase in profitability and creating higher earnings for shareholders.

However, there are some areas that need improvement for Zomato Ltd. The Non Operating Income, which is 176.61% of the Profit Before Tax (PBT), indicates that the company's income from non-business activities is high. This may not be a sustainable business model. The Non Operating Income has also reached its highest at Rs 219.00 crore in the last five quarters, which may not be sustainable in the long run.

Overall, Zomato Ltd has shown a strong financial performance in the quarter ending December 2023. With a positive trend in key areas such as PAT, Net Sales, and Operating Profit, the company is on a path of growth and success. However, it is important for the company to address the issue of high non-operating income and work towards a sustainable business model. Based on these financial results, MarketsMOJO has given a 'Hold' call for Zomato Ltd's stock.