Zomato share price may rally 73%, gets buy rating as sell-off seems to be overdone; check raised target price Zomato share price jumped 3.5 per cent to Rs 47.25 apiece intraday on BSE on Friday. The stock is likely to rally 73 per cent from the last close to Rs 79. The research and brokerage firm Kotak Institutional Equities has upgraded the stock to ‘buy’ from ‘add’, and raised target price to Rs 79 from earlier Rs 77 apiece. Earlier this Jefferies said that the food aggregator firm deserved much better valuation than what the market was ascribing. Zomato stock price tanked 8 per cent after the expiry of lock-in of pre-IPO investors. Kotak Institutional Equities believes that the sharp correction in the stock was unwarranted and current stock price was ‘baking in fairly pessimistic growth assumptions for the food delivery business’. During 25-27 July this year, Zomato stock price plunged 18 per cent. The research firm noted that the daily traded volume of the stock over the same period has increased sharply, suggesting some heightened stock supply in the market. The research firm said that Zomato will need to make upfront investments in the quick commerce business. “Its March 2022 cash balance of US $1.6 billion is sufficient in our view to fund the next few years of losses. We project US $525 million of losses in food delivery and quick commerce over FY2023-24 implying that Zomato will still end up with a cash balance of US$1.1 billion by March 2024. The research firm doesn’t anticipate any near-term liquidity constraints for the company. Kotak Institutional Equities said that Zomato’s food delivery business is well-poised to grow at a strong pace over the next decade led by attractive market opportunity and strong execution capability. The stock recommendation in this story are by the respective research analyst and brokerage firm. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.
Logistics, good or bad, are driven by the states and the commerce ministry has a LEADS (Logistics Ease Across Different States) report, based on perceptions. The 2023 version was released in December. Since states are heterogenous, in the reporting, they are divided into four groups—coastal, landlocked, north-east, and UTs. States that do well are called achievers. Nomenclature matters. Thus, states that are middling aren’t called average. They are called fast movers. States that are sub-par are called aspirers. Let me highlight coastal states, since 75% of export cargo is estimated to originate from them. Among coastal states, ones that do well are Andhra Pradesh, Gujarat, Karnataka, and Tamil Nadu. The ones that lag are Goa, Odisha, and West Bengal. While India’s logistics performance may have improved over time, that’s not true of every state. Some have slipped. Most states have a state-level logistics policy, including Goa and Odisha. West Bengal, bottom of the pecking order in the coastal category, doesn’t have one. To quote from LEADS 2023, “Looking ahead, the State (West Bengal) could benefit from formulating a State Logistics Master Plan and State Logistics Policy to drive efficiency improvements and facilitate investments within the logistics sector and undertake consultation with the logistics stakeholders for educating and informing them about the initiatives State is undertaking for the development and improvement of logistics sector.”
Logistics has been talked about for a long time and India has also focused on improving performance. We are now getting some precise data on measurement and quantification. That helps.
Bibek Debroy, chairman, EAC-PM. Views are personal.