27 Jul , 2022 By : Kanchan Joshi
Shares of Zomato snapped two-days losing streak to rise in Wednesday's opening deals as the stock surged more than 5% to Rs43 apiece on the BSE. Zomato shares hit new record lows for last two consecutive sessions post the ending of the mandatory pre-IPO (Initial Public Offering) shareholders lock-in period on July 23.
Zomato shares made stellar debut on July 23, 2021 on the stock exchanges, but the stock has lost more than 65% of their value since then on concerns about valuations and as global growth stocks cratered. The stock hit a record Rs159.75 in November 2021 and has been falling since then amid a global carnage in tech stocks.
Investors are also not comfortable with the acquisition of Blinkit (formerly known as Grofers), which Zomato recently acquired for Rs4,447 crore which acted as a catalyst in the food delivery platform's downward movement as Blinkit is a loss making start-up.
Global brokerage Jefferies, on the other hand, is bullish on Zomato stock. In a note yesterday, it said, “Zomato management has accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the foreseeable future. Adjusted Ebitda losses for 4QFY22 was Jefferies also sees a consistent improvement in profitability in food delivery despite strong 30% compound annual growth rate (CAGR) over FY22-25E (well ahead of global/regional peers. The shine of new age tech stocks is fading away at a very fast pace. In the ongoing market correction due to geopolitical crisis and interest rate hikes due to inflation, share prices of all new age fintech startups have tanked significantly. Zomato is scheduled to report its first-quarter results on August 1. The company had reported a 75% jump in fourth-quarter (Q4FY22) revenue, while gross order value (GOV), the total value of all food delivery orders on its online platform, surged 77% from the year-ago quarter.
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