Zomato shares saw yet another late spurt in share value on Friday after it made a fresh hike in the price of its subscription-based offering dubbed ‘Zomato Gold.’
What Happened? The popular food-delivery app re-launched ‘Zomato Gold’ a few months back with an introductory subscription package for 3 months priced at ₹149. Although in stages, that price has only shot up over time with the package now priced at ₹299. Investors appear to be quite cheerful about the move.
Following the uptick in Gold prices, brokerage firm Kotak Institutional Equities retained its ‘Buy’ rating on Zomato with a target price of ₹82, signalling an upside potential of 60% from the current market price of ₹51 a share.
“We believe Zomato will eventually increase its pricing by offering higher renewal prices to existing customers (only three-month plans are on offer currently). Further, Zomato is also negotiating for higher take rates with restaurants, which can also offset any impact of Zomato Gold,” Kotak Equities said.
Kotak’s analysts point out that Zomato has previously tried tinkering with new Blinkit services, such as offering printouts and high average order value (AOV) products like phones; those that didn’t work were soon abandoned. The firm believes that the introduction of local services is another such effort and shouldn’t result in a major financial drain.
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Per a report from early March, Blinkit could soon move into the home services category where it intends to take on the likes of Urban Company.
Price Action: Zomato shares were trading 3.5% higher at ₹54.94 on Friday afternoon.
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