Credit Suisse has maintained its ‘outperform’ rating on the stock, with a target of Rs 90. The brokerage said Zomato is on a clear road to profitability growth. It said that existing core customers would drive the food business. CS said in a duopolistic industry, the core user base will drive margins.
“Quick commerce is an adjacency, but industry winners are still not clear,” it said.
On Wednesday, the scrip recovered from a low of Rs 40.55, to hit a high of Rs 44.40, marking an 9.5 per cent intraday rebound.
CS target suggests a 112 per cent upside over the prevailing price.
A day ago, Jefferies said it remained bullish on the counter, as it felt that management has accelerated its journey towards better unit economics. It has a target price of Rs 100 on the stock, hinting an upside of 137 per cent.
“Blinkit acquisition elongates the path to profitability and despite management guidance on a break-even in food delivery, investors are not giving much benefit of doubt,” it added. “Night is darkest just before dawn.”
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