Zomato gains as investors optimistic about growth after Amazon shuts down food-delivery business

Zomato Share Price: Shares of online food delivery platform Zomato jumped around 2 per cent amid reports that Amazon has decided to shut down its food delivery business by the end of this year. "After a careful evaluation, we have decided to discontinue Amazon Food from December 29, 2022," Amazon told its restaurant partners. Amazon launched the delivery service three years ago i.e. ahead of the COVID-19 pandemic. It onboarded about 3,000 restaurants partner and has a network of around 15,500 pin codes. 

The scrip was trading at 65.10 at around 11:20 am. In the last trading session, the counter had closed at Rs 64. 

However, fundamental expert Sandeep Jain gives a 'sell' call on high. 

"There is no recommendations to buy this share. Those who are holding Zomato shares must exit on the bounce," Jain told Zee Business. 

Earlier, Jefferies had estimated an upside of nearly 60 per cent or target of Rs 100 and Morgan Stanley gave an ‘Overweight’ rating with a target of Rs 92.     

Zomato reported a narrowing of its consolidated net loss to Rs 250.8 crore for the second quarter that ended September 2022.

The company's consolidated net loss stood at Rs 434.9 crore in the year-ago period. Revenue from operations increased to Rs 1,661.3 crore during the July-September quarter, as against Rs 1,024.2 crore in the corresponding period of the previous financial year, it said in a regulatory filing.

The company said this is the first quarter where it has crossed the billion-dollar annualised revenue mark. However, its total expenses also rose to Rs 2,091.3 crore during the quarter under review, from Rs 1,601.5 crore a year ago.

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