The brokerage maintained its “Underperform” rating on Zomato with a price target of ₹96, which impies a potential downside of 46% from Thursday’s closing levels. The brokerage has had an “underperform” rating on Zomato since May last year, after it downgraded it from its earlier rating of “neutral.”
Macquarie is one among the three analysts that have a “sell” or equivalent rating on Zomato.
Macquarie wrote in its note that the competitive intensity is on the rise as JioMart will start delivering groceries in 30 minutes from next month. JioMart plans to initially provide these services in eight cities and then expand to the top 20-30 cities in the country during the first phase.
The brokerage also continues to see downside to consensus forecasts and margins for Zomato’s quick commerce business “Blinkit.”
This view is contrary to the one shared by Goldman Sachs earlier last month, where it valued Blinkit at a higher multiple compared to Zomato’s core food delivery business.
For the March quarter, Blinkit turned EBIT positive, while its revenue more-than-doubled on a year-on-year basis to ₹769 crore.
Zomato’s net profit for the March quarter stood at ₹175 crore, compared to a net loss of ₹188 crore during the same quarter last year. The profit figure was also aided by a 37% jump in the company’s other income, which came in at ₹235 crore.
Shares of Zomato are trading 4% lower at ₹173.90. The stock has risen over 150% in the last 12 months.
