Shares of Zomato rose 2 per cent in Thursday’s trade after a subsidiary of Singapore-based sovereign wealth fund Temasek emerged as a buyer, as Alipay dumped Rs 1,631 crore worth company shares in bulk deal on Wednesday. The stock rose 2.07 per cent to hit a high of Rs 66.55 on BSE. This was in addition to 2.60 per cent rise in the previous session.
Camas Investments PTE, an wholly-owned subsidiary of Temasek, bought 9.8 crore shares at Rs 62 a piece worth Rs 607.60 crore, NSE bulk deals data showed. Alipay Singapore Holding PTE sold 26.28 crore shares at 62.06 a piece worth Rs 1,631.39 crore.
In its latest note, JM Financial said macro challenges may weigh on near-term growth trajectory of Zomato.
“Zomato’s earnings delivery in the latest quarter suggested that there were certain growth trade-offs that the company made in its food delivery segment as it focused on meeting the profitability metrics communicated to the shareholders. While our initial impression was that seasonality was the main reason for the sequential deceleration in growth during the September quarter, a re-look at some of the management commentaries and industry checks makes us think that growth concerns for the Food Delivery business could in fact be more severe than what the we are anticipating,” it said.
This is, JM Financial said, more so from a near-term perspective. The brokerage said the near-term growth blip could provide an interesting entry point for investors to accumulate positions and partake in the long-term value-creation opportunity.
“We continue to believe that there is immense potential for the food delivery industry to enlarge its consumer base and grow meaningfully bigger over time,” it said while suggesting a target f Rs 126 on the stock. Kotak Institutional Equities has a target of Rs 100 on the stock.
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