Zomato share price zoomed over 4% on Wednesday as UBS reiterated its ‘buy’ call on the stock.
What Happened: The food delivery giant has been having a tough few weeks as many of its delivery partners went on strike against the change in the payout structure at its subsidiary BlinkIt.
The strike has been estimated to hit the quick commerce company’s revenue by 1%. However, the company today clarified that these disruptions have “no material impact on the operations /financial performance of the company (meaningfully less than 1% revenue impact).”
However, the company’s stock received a nice boost today as UBS maintained its ‘buy’ rating for the stock with a price target of ₹80 – around 50% upside from the stock’s last closing price of ₹53.35. The price target is however lower than the analysts’ earlier estimate of ₹90.
The firm noted that the Deepinder Goyal-led startup had lost market share to its rival Swiggy due to more pronounced increases in Zomato’s delivery fees. However, analysts see this changing, with the company relaunching its loyalty program in Zomato Gold.
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Domestic brokerage firms ICICI Securities and Motilal Oswal remain bullish on the stock. The firms in their latest research notes released this week gave the stock a ‘buy’ rating. ICICI Securities has a price target of ₹65 on the stock, while Motilal Oswal has a target price of ₹70 for the stock.
Price Action: Zomato’s share price was up 2.53% to trade at ₹54.65 in the early hours of trading on Wednesday.
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