Zomato stock price: Blinkit launched ‘poison’ for Zomato? Here’s What Global Brokers Say

Shares of the food delivery platform are down more than 58% from its all-time high, putting the stock firmly in a bear position. However, global brokers still maintain their mixed stance towards this new age internet company.

Global research company HSBC Bank believes that building a grocery business will act as a “poison” for Zomato.

It would require reasonably high investment and therefore burn cash and potentially be a significant logistical challenge to undertake, it added.

The brokerage emphasized that Zomato must strive to build its grocery business closer to this framework and leverage technology to design and manage its dark stores to provide 4,000-5,000 holding unit with delivery turnaround time 10-60 minutes.

It also added that average order value (AOV) has remained steady since Covid-19 took the lead, and that was the biggest positive surprise since August 2021.

“Additionally, we fundamentally believe that unlike many other segments in the new tech space, food distribution is relatively mature, with a healthy proprietary structure and a clear value proposition.” Building and growing hyper-local businesses will remain a key challenge in the coming quarters, but nonetheless we don’t think there’s much value to these businesses,” they added.

HSBC has a ‘Buy’ order on the stock with a target price of Rs 85 per share.

However, Macquarie has started covering its stock with a ‘Underperform’ rating with a target price of Rs 55 per share.

It says Zomato needs 70k additional users per year to meet earnings estimates. Scale is key to driving improved profitability, and if Zomato cannot rapidly grow its trading user base, the negative impact on consensus estimates will increase with steeper cuts. necessary for Ebitda.

In the quarter ended March 2022, the company’s losses nearly tripled to Rs 360 crore while revenue skyrocketed 75%. In fiscal year 2022, the company’s loss was Rs 1,222.5 crore, compared with Rs 816.4 in the previous year.

Zomato is listed in July 2021 with a high premium. Retail investors owned 3.52% of the shares in Q3 compared with 1.6% at the end of December and 1.4% as of September 30, 2021, data is available in a public database. company AceEquity shows.

At 3:19 pm, the stock was trading 0.07% lower at Rs 69.95 on BSE. Zomato currently has a market capitalization of Rs 54,958 compared to Rs 98,731.59 on July 23, 2021, its listing date.

(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. They do not represent the views of the Economic Times)

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