Zomato stock call: Citi says 'buy', sees 25% upside; GST penalty may catalyse 'Gold' service

According to Citi, the stock correction could be due to media reports about a new GST penalty on customer delivery charges.

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A day after foreign investor Alipay Singapore Holdings offloaded its entire stake in Zomato, Citi gave a buy call to the food delivery service with a target price of Rs 145, implying about 25 percent from the last trading price. Earlier, on November 29, the stock ended in green at Rs 117.30. The Zomato stock has corrected over 7 percent since the conclusion of the World Cup. At open on November 30, the stock gained around 0.6 percent and was trading at Rs 117.30.

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As per exchange data, Alipay Singapore Holding Pte Ltd exited Zomato by selling its entire shareholding of 3.44 percent or 29,60,73,993 equity shares via open market transactions at an average price of Rs 112.70 per share, amounting to Rs 3,336.75 crore. Additionally, Morgan Stanley Asia (Singapore) Pte bought 4,39,73,993 equity shares or 0.51 percent stake in Zomato at an average price of Rs 112.70.

Also Read: Alipay likely to sell 3.4% stake in Zomato via block deal

According to Citi, the stock correction could be due to media reports about a new GST penalty on customer delivery charges. The new GST, the report added, would add Rs 5 per order to non-Zomato Gold orders and may further support the adoption of Gold programme loyalty.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.