Food aggregator Zomato has recently unveiled its 'District' app, a one-stop destination for going out, which according to the management is the theme for the next decade. Brokerage firm Jefferies showered optimism over Zomato's new venture as it foresees strong opportunity emerging from a market that is supply-constrained.
Jefferies remains bullish to see new use cases emerging from Zomato's going-out venture, starting with dining out and ticketing. "Industry is in its infancy as current TAM (Total Addressable Market) may be limited, but that's how food delivery and quick commerce were a while back," Jefferies said.
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On that account, the brokerage reiterated its 'buy' call on Zomato with a price target of Rs 335, reflecting an upside potential of over 17 percent from Thursday's closing.
Meanwhile, the food aggregator also raised Rs 8,500 crore through its recently concluded Qualified Institutional Placement (QIP). Its board approved the allocation of 33.6 crore shares through the QIP at an issue price of Rs 252.62 per share.
Zomato disclosed a decline of Rs 1,726 crore in its cash reserves during the September quarter, largely due to its Rs 2,014 crore acquisition of Paytm’s entertainment ticketing business. The company’s cash balance now stands at around Rs 10,800 crore, down from Rs 14,400 crore, reflecting its investments in quick commerce and acquisitions. Despite having shifted to cash generation since its IPO, Zomato is focused on bolstering its cash position to navigate the competitive landscape more effectively.
Shares of Zomato slipped one percent in early trade on November 29.
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