New Delhi: Marking the fourth consecutive session of decline, shares continued to fall on Thursday. The food delivery giant’s stock has plunged nearly 25 per cent since Monday after the company acquired instant commerce delivery firm Blinkit in an all-stock deal for Rs 4,447.5 crore.

The stock of Zomato fell by 4 per cent on Thursday and reached the level of Rs 55. It had closed at Rs 57.30 on Wednesday.

The latest round of corrections has wiped out Rs 11,680 crore from investors’ kitty as its market capitalization slid from Rs 47,366 crore to Rs 35,686 crore in four days.

Currently, Zomato shares are down 28 per cent from the issue price of Rs 76, while the counter has taken a huge hit of 67 per cent from its 52-week high of Rs 169.10 in November 2021.

Market analysts have pointed out that Blinkit will hurt Zomato’s profit path.

Credit Suisse said the Blinkit deal will likely increase Zomato’s EBITDA loss for FY23 and FY24. It noted, meanwhile, that Blinkit’s annual cash burn is Rs 1,290 crore (or $165 million) and management expects it to remain well within the $400 billion burn it has directed for the next two years.

Said that the Quick commerce space can offer a large complimentary profit pool to players like Zomato, which has built up significant expertise in on-demand services over the years.

The brokerage still has buy calls on Zomato. JM Financial finds it worth Rs 115. The target price of Edelweiss is Rs 80. Credit Suisse sees it at Rs 90.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)

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