Shares of foodtech major Zomato dipped as much as 4.9% from yesterday’s (January 6) close to INR 251.60 during the intraday trading today (January 7) due to a bearish outlook presented by brokerage firm Jefferies.

The brokerage firm has given the Sensex listed foodtech major a ‘Hold’ rating along with a price target (PT) of INR 275. This is about 18% lower than Jefferies’ erstwhile PT of Zomato of INR 335.

Back in November, the brokerage had given Zomato a ‘Buy’ rating, citing optimism over the foodtech major’s newly launched ‘District’ app for its ‘going-out’ business.

The new target price is almost 4% higher than the yesterday’s closing at INR 264.65

Zomato’s YTD return dropped by 8.55% and the five day return was down by the same percentage.

In its reasoning for the bearish outlook, Jefferies sighted rising competition for Zomato’s Blinkit in the quick commerce arena. It cited aggressive moves by existing competitors along with the entry of new players in the space. It believes that these factors could pressure Zomato to increase discounting, potentially impacting profitability in the medium term.

(The story will be updated soon)

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