Macquarie sees Zomato share price correcting further from current levels; Credit Suisse remains bullish—check target prices?

Zomato Share price target: Despite gaining over 20% in the past one month amid a volatile market, shares of Zomato continue to trade below their IPO issue price of Rs 76 as on Tuesday June 14, 2022.  

On Tuesday, shares of the restaurant aggregator gained over two and half per cent despite the government on Monday asking e-commerce food majors to submit plans for improving complaint redressal mechanism withing 15 days.  

However, global brokerage firm Macquarie initiated coverage on the stock with an underperform rating for the stock. As per the brokerage, the stock can correct further from current levels. Though, it mentioned that it expects the company to maintain a dominant position in the market, and it also has a good growth prospect, but the stock does not infuse confidence.  

"Profitability is a function of scale, and this growth concern is corroborated with ongoing soft Apptopia metrics. Despite 60 per cent share price decline (vs index minus 15 per cent), see further downside," it said while assigning a target price of Rs 55 on Zomato. The target price set by the global brokerage firm is close to 52-week low of the share that it touched on May 11, 2022.  

Meanwhile, Credit Suisse maintained an 'outperform' rating on Zomato with a target price of Rs 90. It translates into an upside of 33.5% on Monday's closing price of the share at Rs 67.40.  

The government on Monday asked online food aggregators to submit a proposal on improving the consumer grievance redressal mechanism within 15 days. The direction was given by the Department of Consumer Affairs during a meeting chaired by Secretary Rohit Kumar Singh with major e-commerce food business operators, as per the official release said. 

"The Department of Consumer Affairs on Monday directed major e-commerce food business operators (FBOs) to furnish the current framework as well as a proposal on improving the consumer grievance redressal mechanism within 15 days," said the official release. 

The meeting was attended by major online food business operators including Swiggy and Zomato as well as the National Restaurant Association of India (NRAI). 

"During the last 12 months, over 3,631 grievances have been registered on the National Consumer Helpline (1915) for Swiggy and 2,828 have been registered for Zomato," the release further said.