The Indian equity markets have started the new trading week on a weak note. The benchmark indices are trading in red with deep cuts on Monday, February 10.
Staying Away From Swiggy & Zomato?
This comes to pass as volatility in the Indian markets continues. Meanwhile, some headlining equities are also trading in red. Here, two of the biggest names in the food delivery and quick service business, Zomato and Swiggy, are trading in red with deep cuts on Monday.
This development comes as some segments have cautioned investors from going bullish on these two companies. Mayuresh Joshi, Head Equity, Marketsmith India while speaking to the Economic Times, said that these companies might face some negative cash flows in the time, thereby cautioning them from going all out into these stocks.
The companies, along with their non-listed competitor, Zepto, have indulged in extensive allocation of their resources, as they have tried to up their game in the highly competitive quick service and delivery segment.
Zomato Ltd
When we look at the companies in question, Deepinder Goyal-led Zomato, saw it shares decline further. The company has not had its best run, ever since it was made a part of the elite Sensex 30 club.
On Monday, the company shares declined further by 3.16 per cent or Rs 7.39. This took the overall of the company shares to Rs 226.51.
Zomato, apart from its food delivery business, also owns, Blinkit and Blinkit Bistro.
Swiggy Ltd
When we look at the shares of Zomato's rival from Bengaluru, the delivery company, which also operates Swiggy Genie, Swiggy Snacc, and Instamart saw bigger cuts in its stock prices.
The company shares, while showing signs of recovery, declined by 4.56 per cent or Rs 17.35. This took the overall value of the company shares to Rs 363.30 per piece.
10- Minute Delivery
It needs to be noted, that this also comes at time, when both these companies have doubled down on their intentions to further expand a 10-minute food delivery service.
This move has received backlash, in addition to legal threats from restaurant body, National Restaurant Association of India or NRAI.
