Why is Zomato down to a 5-month low?
Answer
Answer
Answer
Zomato touched Rs.119, the lowest level in last 5 months. It has fallen 29% from its recent highs. The fall came after JP Morgan noted that Zomato business quality was lower than Swiggy. Zomato offers higher discounts, suggesting aggressive pricing discounts adversely impacting contribution margins. JP Morgan has an underweight call on Zomato with expensive valuations and negative unit economics.