After Zomato saw gains of over 170 percent, global brokerage Macquarie has retained its ‘underperform’ rating on the stock, setting a target price of Rs 96. This target suggests a potential downside of 47 percent.
Macquarie’s bearish outlook is driven by the rising competition in the e-commerce space, with many platforms entering the quick commerce sector.
Despite acknowledging Blinkit as an efficient operator, the brokerage expressed concerns over the increasing competitive intensity.
While India’s retail market has a large potential, Macquarie believes the heightened competition will impact consensus estimates negatively.
As of 10:20 am, Zomato shares were trading 3.65 percent lower at Rs 174.00.
JioMart, the largest grocer and retailer in India owned by Mukesh Ambani’s Reliance group, will soon offer 30-minute delivery. This service will start in the top eight metro cities next month and will expand to 20-30 cities in the first phase. Eventually, it will cover the entire country. Orders will be fulfilled from JioMart’s network of over 3,500 stores.
