Food delivery company Zomato has been causing bloodshed in the stock exchanges since the beginning of this week. On Tuesday, Zomato shares fell further, hitting a 52-week low. After the loss of love in Zomato shares, it reminded veteran Shankar Sharma of the film Deewar, where the Big B of Bollywood, Amitabh Bachchan quoted a famous dialogue when he got the news of his father’s death. The veteran concluded that Zomato shares were a game over on the listing itself. In a span of two days, Zomato shares have lost over 22% on the BSE.
on BSE, zomato settlement of shares below 41.65 5.90 or 12.41%. The stock was near its fresh 52-week low 41.25 each which was seen in the first trading hours. At the current market price, Zomato has a . Is Market evaluation of 32,793.77 crore.
Shares of Zomato have declined since Monday. Since July 22, when the shares were around 53.65 shares on the BSE have lost nearly 22.37% in two days this week.
Last week, on Friday, Zomato’s shares declared on August 1, 2022 to consider and approve the unaudited financial results (standalone and consolidated) of the company for the quarter ended June 30, 2022 (Q1FY23).
Shankar Sharma told TODAY, “Zomato stock reminds me of what Amitabh Bachchan said in the wall after hearing the news of his father’s death: “Maar toh woh gone twenty years ago. Aaj toh ki only ki jal ja raha hai” (He died 20 years ago, today he is only being burnt)”.
Referring to Zomato shares, Sharma said, “The listing game was over.
Have Zomato Shares Ended Its Doomsday?
Zomato launched its IPO last year at the price band between July 14 and July 16. 72 to 76 per. Overall, the IPO received strong demand from investors as the issue was oversubscribed 38.25 times.
After the IPO, Zomato shares made their market debut on July 23, 2021 on BSE and NSE. The shares were listed on the stock exchanges at a premium. Shares made their entry on BSE 115, up 51.32% from the upper price band of the IPO. Shares later hit 52-week high 169.10 each on BSE.
Zomato shares were up last time The 100 mark was on January 25 this year and since then it has been trading below the level.
In one month, Zomato shares have lost nearly 37%, while the year-on-year decline is more than 70.5%. Since its launch in the market, the shares have contracted around 67% on the BSE.
Is Zomato’s stock game over?
In their report, analysts at Jefferies said, “Concerns about the Fed tightening are weighing heavily on unprofitable Internet names globally. The entire sector is undergoing a re-adjustment as the focus shifts from growth to cash flow.” Fangman is down 15-65% YTD. This is also affecting global food delivery stocks which are down 50-65% YTD, with Zomato being the worst performing stock.”
According to analysts, the tough times have shifted focus and sharper focus on cash flow in start-ups. The Zomato management has also accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the near future. Adj Ebitda Losses for 4QFY22
For the entire FY 2012, Zomato’s net loss widens to 1,222.5 crore as compared to a loss of Rs. 816.4 crore in FY 2011. Consolidated revenue, however, climbed to 4,192.4 crore 1,993.8 crore in the last financial year.
Jefferies analysts pointed out that unlike earlier when Zomato intended to invest in multiple businesses, some strategic (with an eye on an eventual merger) and others as financial investments, the company now intends to conserve cash. Is. The company is not planning to provide any resources for minority investments, existing or now.
“The only exception to MGMT’s conservative stance is its decision to purchase Blinkit, which may be driven by FOMO or to protect the food delivery turf highlighted after the acquisition. The time horizon is probably longer for MGMT. Investors This business is likely to become a cash goose in the medium term – Zomato itself has guided for investments of $400 million over the next two years. This remains a medium-term concern for investors as it will impact the company’s profits. will be,” said the analysts.
On the stock outlook, analysts at Jefferies said, “After the sharp correction in Zomato share price, the stock now trades at 0.9x 1Y forward EV/GMV and 3.5x EV/revenue. While it is at a premium to global and regional peers. However, this is justified in the context of a long growth run-way with a high clear medium-term forecast on GMV (30% for Zomato vs 10-20% for peers). We are consistent in profitability in food delivery despite a Sees improvement FY22-25E (far ahead of global/regional peers).
Jefferies analysts set target prices 100 Shares On Zomato With Upside Case The downside of 160 and 40 per.
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