Shares of Zomato rose as much as 4.77 per cent to hit an intraday high of Rs 55.90 after it informed exchanges that most of Blinkit stores resumed operations after it made changes to the payout structure of its delivery partners amid protest by its delivery partners.
"Over the last few days we have made changes in the delivery partner payout structure with respect to the Blinkit business to address the needs of delivery partners, improve customer experience and reduce cancellation/order rejection frauds by few delivery partners in the system," Zomato said in an exchange filing.
Zomato had to close around 50 Blinkit stores around New Delhi after its delivery partners protested against the recent changes it made to their payout structure.
"These disruptions and changes have no material impact on the operations/financial performance of the Company (meaningfully less than 1% revenue impact)," Zomato added.
Meanwhile, brokerage firm Motilal Oswal has initiated buy coverage on Zomato stock for target price of Rs 70 per share indicating an upside of 30 per cent from yesterday's closing price.
"The food delivery industry in India is all set to grow rapidly in the medium term driven by intensifying internet penetration, rising consumption and growth in urbanization. Zomato is a dominant player in the industry and we forecast the company to report 29 per cent revenue CAGR over FY23-25. We expect strong growth to be complemented by the company turning profitable over FY25, despite elevated competitive intensity. We initiate our coverage on the stock with a buy rating and a target price of Rs 70," Motilal Oswal said in a report.
As of 12:43 pm, Zomato shares traded 2.44 per cent higher at Rs 54.65, outperforming the Sensex which was trading on a flat note.
