Zomato dipped as much as 4.49% from last week’s close to INR 238.7 during the intraday trading today
At the time of writing the story, Zomato’s stock was trading at INR 229.65 a piece on BSE
The food delivery giant’s shares have entered their seventh consecutive day of losses since January 2
Shares of foodtech major Zomato
dipped as much as 4.49% from last week’s close to INR 238.7 during the intraday trading today (January 13) due to a bearish outlook presented by brokerage firm Jefferies.
At the time of writing the story, Zomato’s stock was trading at INR 229.65 a piece on BSE.
Notably, the food delivery giant’s shares have entered their seventh consecutive day of losses since January 2– marking more than a 22% drop over the past few weeks after the stock’s 52 week high of INR 304.5 in December 2024.
Earlier this month, citing intensifying competition for Blinkit in the quick commerce sector, Jefferies had given the foodtech major a hold rating along with a price target (PT) of INR 275– about 18% lower than Jefferies’ erstwhile PT of Zomato of INR 335.
The firm pointed to aggressive strategies by existing rivals and the entry of new players as key challenges. Jefferies anticipates these pressures may compel Zomato to increase discounts, potentially affecting profitability in the medium term.
In contrast, global brokerage firm Morgan Stanley maintained an ‘overweight’ rating on Zomato, keeping its PT unchanged at INR 335.
Despite mounting competition, Morgan Stanley remained optimistic about Zomato’s prospects, expecting its focus on profitability to deliver a 33% compound annual growth rate (CAGR) in revenue between FY25 and FY27.
The firm also highlighted the company’s steady growth in monthly active users as a strong indicator of Zomato’s future potential.
On the financial front, the company’s consolidated net profit slumped 30% to INR 176 Cr in the September quarter (Q2) of the financial year 2024-25 (FY25) from INR 253 Cr posted in the preceding June quarter, hurt by a surge in certain expense buckets.
Zomato, which has been seeing a steady growth in its PAT since Q1 FY24, saw a slump in its bottom line in Q2 even as its operating revenue grew more than 14% to INR 4,799 Cr in the reported quarter from INR 4,206 Cr in Q1 FY25.
