Macquarie, a foreign brokerage, has predicted a nearly 50 percent decline in food delivery platform Zomato’s share price over the next year due to heightened competition in the quick commerce sector, as per a report by Moneycontrol.
Macquarie reaffirmed its 'underperform' rating on Zomato, setting a price target of Rs 96, suggesting a potential 46 per cent decrease from Thursday's closing price.
Since May last year, an underperform' rating on the food delivery giant has been held by Macquarie. It was downgraded from its earlier rating of neutral. Interestingly, Macquarie is one of the three analysts that gave the food delivery giant a 'sell’ or equivalent rating.
Macquarie noted that competitive intensity is increasing as JioMart plans to start delivering groceries within 30 minutes next month. Initially, JioMart will offer these services in eight cities, with plans to expand to the top 20–30 cities in the first phase. This perspective contrasts with Goldman Sachs' view last month, which valued Blinkit at a higher multiple than Zomato's core food delivery business.
Read: Why Aren't Swiggy and Zepto Following Zomato's B2B Grocery Path?
For the March quarter, Blinkit achieved EBIT positivity, with its revenue more than doubling year-on-year to ₹769 crore. With the growth of Blinkit, the company even announced that the company aims to reach 1,000 dark stores by March 2025. Albinder Dhindsa, Founder and CEO, Blinkit, said, "In addition to scaling up the existing store network and use cases, we will be adding more use cases so the Blinkit platform is even more useful in the everyday lives of our customers.”
Zomato announced a net profit of Rs 175 crore for the fourth quarter, which ended in March. This is the food aggregator's fourth consecutive quarter of positive results.
Similarly, the company reported consolidated revenue of Rs 3,562 crore. This was a 73 percent increase from Rs 2,431 crore that was reported a year ago in the same period.
