On January 7, food technology major Zomato witnessed a decline in its stock value during intraday trading. The shares fell by approximately 4.9% from their January 6 closing, reaching ₹251.60. This dip is attributed to brokerage firm Jefferies revising its outlook on the company.

Zomato At Hold Rating 

Jefferies has assigned Zomato a "Hold" rating with a reduced target price of ₹275, a significant 18% reduction from its previous price target (PT) of ₹335. The downgrade reflects a cautious stance despite Zomato’s efforts to diversify its offerings.

In November, Jefferies had taken a more optimistic approach, giving Zomato a "Buy" rating. This was influenced by the company’s launch of its new "District" application, aimed at capturing opportunities in the growing out-of-home dining business. The brokerage had then highlighted the potential of this initiative to drive growth.

Zomato Sensex Update

Zomato, listed on the Sensex, has been actively working on expanding its business model beyond traditional food delivery. However, the revised outlook by Jefferies indicates concerns about the company’s near-term growth prospects amidst broader market uncertainties.

Investors are now closely monitoring Zomato’s performance and strategic initiatives to gauge its future trajectory. The company’s ability to leverage innovations like the District app and navigate market challenges will be critical in regaining investor confidence and stabilizing its stock performance.

Importance Of Brokerage

This recent development underscores the importance of brokerage evaluations in shaping market sentiments and influencing stock trends. The new target price is seen to be around 4% higher than yesterday's close. Zomato's YTD return fell to 8.55% and the 5-day return was also less than the same percentage.

On January 7, food technology major Zomato saw a huge drop in its share price during intraday trading. The stock has seen a decline of about 4.9% from the closing price of January 6 and this is a huge update for the market also.