The shares of Zomato have been in retrograde for the past few trading weeks. The shares of the company are once again in red on Tuesday, January 7.
Jefferies Downgrades Zomato
Last month, the food-delivery company was inducted into the Sensex 30, after Jindal Steel was left out of the elite group. The company shares have not had the best time in the recent past.
Addding to the woes of the company, the American brokerage company Jefferies downgraded the company stock. In its bulletin, the broking company downgraded the company stock to hold.
The rating agency slashed the ‘Target’ To Rs 275 per share, from the previous Rs 335 per piece.
According to the agency, after a year of doubling in 2024, 2025 will mark the year of consolidation.
The agency attributes these cuts to the rising competition in the food delivery and quick service business, which has only grown fierce in the recent past.
Zomato Shares In Red
Zomato along with its quick service arm Blinkit is taking on the major market forces including Swiggy and its Swiggy Instamart and Zepto.
In addition, other e-commerce giants like Flipkart are also expected to enter the market with its Flipkart Minutes.
Jefferies also claimed that the pricing in the cut-throat, price-sensitive market, along with the barrage of discounts could hurt the company’s profitability.
In the past five trading sessions alone, the company shares dipped by 9.52 per cent in 5 trading sessions.
In the past month, the decline in the shares prices looked even more red, as the stock value of the Deepinder Goyal-led company diminished by 14.53 per cent or Rs 42.90.
On Tuesday, the trend of depletion in investors from the company continued. Zomato shares dropped by a further 4.70 per cent or Rs 12.45. This took the overall value of the company shares to Rs 252.40 per piece.
