Posted on April 1, 2025, by Niftynews
Zomato Share Price Surges Following Goldman Sachs Stake Purchase
Zomato share price saw a notable increase on Tuesday, rising by 1.30% during the trading session, after Goldman Sachs made a substantial investment in the company. The global investment bank purchased shares worth ₹281 crore through open market transactions on Friday. As of 10 AM on April 1, 2025, Zomato shares were trading at ₹204.68 on the NSE, despite broader market sentiments remaining weak.
Goldman Sachs, through its affiliate Goldman Sachs (Singapore), acquired a total of 60.07 lakh shares in the online food delivery platform. The shares were bought within a price range of ₹199.5 to ₹204.68 per share, marking a total transaction value of ₹280.96 crore. Interestingly, while Goldman Sachs was accumulating shares, Hong Kong-based Kadensa Capital, via its subsidiary Kadensa Master Fund, sold an equal number of shares in both Zomato and Hindustan Aeronautics (HAL) at the same price point.
Should You Buy or Sell Zomato Shares?
With Goldman Sachs’ purchase of a substantial stake in Zomato, there has been renewed interest in the stock. However, potential investors should approach with caution as the stock’s performance has been under scrutiny. Zomato share price has been on a downward trajectory over the past few months, with the stock falling over 25.92% in the last six months and more than 9% in the last month alone.
Recent Analyst Views on Zomato
Global brokerage firm BofA Securities has recently downgraded Zomato’s stock to ‘Neutral’ from ‘Buy’. The firm also reduced its target price for the food delivery giant from ₹300 to ₹250, citing concerns over increasing losses in the quick-commerce segment and a slowdown in food delivery growth. The downgrade is primarily driven by the expectation of higher losses in quick commerce, which is anticipated to increase competition and drive down profit margins in the near future.
BofA also highlighted that Zomato’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) for the fiscal years 2026 and 2027 are expected to be 20% lower than the market consensus. These forecasts paint a challenging picture for Zomato, despite its strong market presence.
Quick-Commerce and Food Growth Concerns
The primary concern raised by BofA Securities revolves around Zomato’s quick-commerce segment, which has been growing rapidly but is also facing increasing competition. As more players enter the market, margins in this segment could shrink, leading to greater losses. Additionally, there are concerns about the long-term sustainability of the food delivery growth rate, especially as other companies ramp up their operations and competition intensifies.
While Zomato has shown resilience in the past, investors need to weigh these risks when deciding whether to buy or sell. The recent surge in Zomato share price following Goldman Sachs’ investment is a positive sign, but it is essential to remember that market sentiment and future growth concerns play a crucial role in the company’s trajectory.
Zomato’s Performance: A Mixed Outlook
Despite Goldman Sachs’ confidence in the company, Zomato has struggled with stock price performance in recent months. The Zomato share price has been declining due to the factors outlined by analysts, including increasing operational costs and challenges in sustaining growth in a highly competitive food delivery market.
Zomato’s ability to adapt to these market conditions will be key in determining the future performance of its shares. For long-term investors, the company’s potential to innovate and capture further market share will be critical in deciding whether the current decline is an opportunity or a sign of further challenges ahead.
Conclusion: Buy or Sell Zomato Share Price?
While the recent rise in the Zomato share price following Goldman Sachs’ stake purchase offers a glimmer of optimism, the overall outlook remains mixed. Zomato is facing considerable challenges in its quick-commerce segment, and recent downgrades by major analysts such as BofA Securities suggest that caution may be warranted.
For investors looking to enter or exit, it’s essential to consider both the short-term volatility and long-term growth prospects. If you are risk-averse, a “neutral” stance might be advisable, while more aggressive investors could view this dip as an opportunity to buy at a lower price, especially considering the involvement of major institutional investors like Goldman Sachs.
Ultimately, whether you should buy or sell depends on your investment strategy, risk tolerance, and belief in Zomato share price ability to weather competition and maintain growth in a challenging market.
