Shares of Indian food delivery firm Zomato Ltd jumped over 18% on Tuesday. They were set for their best session, a day after the Ant Group-backed company registered more orders and narrowed its losses in the June quarter.
The Gurugram-based company, which operates in more than 1,000 towns and cities in India, reported a quarterly loss of Rs 1.86 billion ($23.67 million) on Monday, compared to a loss of Rs 3.56 billion last year.
Revenue from operations, mostly from its mainstay food delivery and related fees it charges restaurants for using its platform, rose 67% to 14.14 billion rupees in the three months ended June 30.
Gross order value – or the total value of all food delivery orders placed online on Zomato’s platform – rose 41.6%, and the company said its adjusted EBITDA for the food delivery unit broke-even for the quarter.
“We like Zomato for its long runway for growth, steady market share gains, and fast pivot to profitability, despite challenges – slower growth than in the last two years and heavy investments in Quick Commerce, where profitability is not in sight in the near term,” Morgan Stanley analysts said.
The brokerage resumed coverage of the stock with an “overweight” rating and price target of 80 rupees.
The stock, which lost nearly 60% from its debut price a year ago, was last up 16.5% at 54 rupees, bouncing from record lows seen last week.