Macquarie downgrades Zomato to 'underperform'; Delhivery gets 'outperform' tag

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26 Aug, 2025 12:21

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Brokerage firm Macquarie Research has downgraded Zomato Ltd to 'underperform' from 'neutral' and set 'outperform' ratings to Delhivery.

Macquarie has also reduced the target price for Zomato to Rs 55 a share. It said that despite declining growth momentum in the food delivery sector, Zomato remains a prominent leader in this space. The company's focus on improving unit economics has led to lower estimated net losses for FY24-25. However, the core food delivery business has experienced a halt in sequential growth. On a positive note, Zomato has maintained a stable number of monthly transacting users for seven quarters in a row.

On May 19, Zomato reported that its consolidated net loss for the fourth quarter narrowed to Rs 188.2 crore from Rs 359.7 crore last year. Its revenue from operations jumped 70 percent to Rs 2,056 crore from Rs 1,211.8 crore a year ago.

The Zomato management guided for positive-adjusted EBITDA and profit on a consolidated basis (including quick commerce) within the next four quarters, and plans to achieve this through profit growth in the food delivery business and loss reduction in Blinkit.

Macquarie has set a target of Rs 440 per share for Delhivery. The fourth quarter showed a promising increase in volumes, with EBITDA reaching breakeven. The company is regarded as a leading proxy for India's e-commerce sector.

Although part truckload volumes have improved, they still remain 30 percent lower than the previous year's levels. The EBITDA margin surpassed expectations. Despite higher volumes, line haul costs were lower during the quarter, and there is potential for further improvements in this area as volumes continue to grow, Macquarie said.

Delhivery's net loss widened to Rs 159 crore in the fourth quarter ended March 2023, compared to the corresponding period previous year, as the logistics company's revenue dropped for the second straight quarter amid a slowdown in e-commerce.

Delhivery reported an operating income of Rs 1,859.6 crore for the quarter ended March 31, 2023, 10 percent lower than Rs 2,017 crore in the same period last year, the company's filings with the BSE showed. The logistics company had a net loss of Rs 119.8 crore in the fourth quarter of FY22 (2021-22).

The company's revenue has now declined for two consecutive quarters. In the December quarter, the logistics company's revenue had dropped 8.5 percent from a year earlier.