Zomato’s stock experienced a nearly 3% decline in early Monday trading, following a block deal involving approximately 4.5 crore shares of the food delivery giant. This transaction amounted to a total value of INR 622 crore.
Zomato’s shares were trading at INR 135.55 each at 11:30 am, showing a decrease from the previous closing price of INR 139.6.
Nevertheless, the report could not identify the buyers and sellers participating in the transaction.
Recently, HSBC, Goldman Sachs, and Jefferies have all increased their price targets (PTs) on Zomato, citing the strong growth in its food delivery and quick commerce businesses.
Goldman Sachs increased its price target on Zomato from INR 130 to INR 160, while Jefferies raised its target from INR 165 to INR 190. In contrast, HSBC elevated its stock target by INR 10 to INR 150 per share.
Continue Exploring: Zomato’s bull run continues as Goldman Sachs and Jefferies raise price targets post HSBC’s lead
The stock value of the prominent foodtech company saw a more than twofold increase last year. Starting the year in the INR 50-60 range in the initial month of 2023, it concluded the year surpassing INR 120.
Zomato’s Profitability Focus:
Zomato has recently directed its attention towards profitability, marking its second consecutive profitable quarter. The startup reported a noteworthy surge in profit after tax, reaching INR 36 Cr in the September quarter of the financial year 2023-24 (FY24). This represents an 18-fold increase from the INR 2 Cr PAT in the preceding quarter.
Now, all analysts are closely monitoring the business expansion of Zomato’s quick commerce arm, Blinkit, expecting that its growth will propel Zomato forward.
During the quarter ending on September 30, 2023 (Q2 FY24), Blinkit achieved a positive contribution for the first time. The average order value for Blinkit increased to INR 607 from INR 582 in Q1 FY24.
Continue Exploring: Blinkit records first positive contribution, anchoring Zomato’s quick commerce success
Meanwhile, Zomato and Swiggy, the duo, allegedly received notices for a combined Goods and Services Tax (GST) amounting to approximately INR 1,000 Cr. This represents the 18% tax imposed on the entire sum collected by them as delivery fees since the commencement of their food delivery services.
Continue Exploring: Zomato and Swiggy grapple with INR 1,000 Cr GST notices as tax authorities include delivery charges in revenue assessment