Zomato share price jumped almost 8 per cent in morning trade on BSE on Friday (June 2) amid reports of the revision of discounts at the Open Network for Digital Commerce (ONDC). Shares of Zomato opened at ₹69.40 against the previous close of ₹67.92 and rose 7.8 per cent to touch the intraday high of ₹73.20 in trade so far.
The stock got traction after media reports suggested that ONDC had revised its incentive scheme for network participants to reduce the dependency on discounts for adoption. “The revised incentives will come into effect from June 1, 2023, and succeed the programme rolled out first on January 30, 2023. The programme’s current phase will be live until June 28, 2023,” Moneycontrol reported.
ONDC was touted as a threat to food-delivery platforms like Zomato and Swiggy as it connects restaurants directly to customers. In simple terms, ONDC lets restaurants sell food directly to consumers without the need for a third party (like Zomato and Swiggy).
ONDC is a government-backed platform which works as a network of interconnected e-marketplaces. With ONDC, sellers can sell their products directly to customers. The Department for Promotion of Industry and Internal Trade (DPIIT) launched ONDC in 2021 with the aim of giving a push to the Digital India program.
Many buyer apps such as Paytm, Meesho, etc. have joined the platform along with several seller apps, including BoAt and Delhivery.
ONDC is not a separate app that you can download from Play Store. Instead, ONDC works like UPI, which means it can be added to existing apps like–Paytm, PhonePe and Meesho, etc. ONDC has more than 29,000 sellers that are selling 36 lakh plus products.
Zomato shares hit their 52-wee high of ₹75.55 on November 14, 2022. The stock has risen over 14 per cent in the current calendar year.
The company’s consolidated net loss for the quarter ended March narrowed sharply to ₹188.2 crore on the back of a 70 per cent jump in its overall revenue. Its revenue from operations for the last quarter came in at ₹2,056 crore compared with ₹1,211.8 crore in the corresponding quarter of the previous year.
Read more: Zomato’s consolidated loss narrows in Q4; eyes profitability in next four quarters
Zomato remains committed to turning both adjusted EBITDA and PAT positive by Q4 of FY24 on a consolidated basis. This has made brokerages upgrade their growth estimates in Zomato while raising their target prices on this new-age company’s stock.
Zomato stock top pick in listed new-age firms; brokerages upgrade target price after Q4 results
Shares of Zomato traded 5.24 per cent higher at ₹71.48 on BSE around 11:50 am.
Know your inner investor
Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Download The Mint News App to get Daily Market Updates.
Updated: 02 Jun 2023, 12:16 PM IST