Zomato, Swiggy see significant fall in share prices
The fall in share prices of the food delivery and quick commerce companies, particularly Zomato, can be attributed to its lower-than-expected profit numbers.
The share price of Zomato and Swiggy saw close to 10% decline on the Indian stock markets on Tuesday due to the former's disappointing third-quarter results.
Zomato’s stock began to fall right after the company released its third-quarter earnings on Monday, signalling investor concerns over its performance.
Mirroring a similar trend, Zomato’s market rival Swiggy also experienced a dip in its share price, falling down by 10% at one point of time.
On Monday, Zomato’s stock price stood at Rs 252.85 at 3 pm, but after the announcement, it dropped to Rs 230.70, closing the day at Rs 239.75. The negative sentiment continued on Tuesday, with Zomato’s share price further sliding by 8.43% by 11:50 am.
Swiggy also showed a similar trend. After starting to lose value on Monday, its stock price was down by 7.50% by 11:52 am on Tuesday.
This was primarily due to the 57% drop in profitability for Zomato. While Zomato saw an increase in revenue, its profit was severely impacted by lower consumer demand and higher investments in its quick commerce business, Blinkit.
Market analysts expect similar performance from Swiggy as well.
However, the analysts are divided on the future prospects of Zomato. While some expect the share price to go up, others have a neutral stance.
Edited by Megha Reddy