In a significant move within the Indian food tech industry, Zomato has recently rebranded itself as Eternal Limited and initiated the liquidation of its Netherlands subsidiary, Zomato Netherlands B.V. This decision, effective from April 9, 2025, aims to streamline the company's international operations without impacting its core business in India.
On April 8, 2025, Zomato's share price closed at ₹214.55, marking a 2.35% increase. This uptick reflects a positive market sentiment driven by expectations of improved quarterly order volumes and potential profitability in its food delivery business. The stock opened at ₹213.19, reached a high of ₹219.19, and dipped to a low of ₹210.81 during the trading session. Analysts are optimistic about Zomato's growth, projecting consistent increases in order volume across metropolitan and tier-2 cities.
Despite the promising performance, Zomato's P/E ratio stands at a staggering 290.66, indicating high growth expectations from investors. The company’s market capitalization currently sits at ₹1.92 lakh crore, with a 52-week high of ₹304.70 and a low of ₹146.30. This valuation has drawn mixed reactions from experts, with some believing it reflects Zomato's market leadership and ecosystem strength, while others express concerns over the sustainability of earnings given the thin margins in the food delivery sector.
In a recent note, HSBC maintained a 'Buy' rating on Zomato but reduced its target price from ₹315 to ₹280, citing intense competition in the quick commerce industry. For Swiggy, another major player in the food delivery market, HSBC retained a 'Hold' rating and lowered its target price from ₹460 to ₹385. This adjustment aligns with the broader market trends, as both Zomato and Swiggy saw their shares rise in early trading on April 11, 2025, with Zomato increasing by over 3% to ₹218.2 and Swiggy gaining 2.3% to ₹347.5.
The ongoing competition in the quick commerce space continues to be a focal point for investors. Analysts at Jefferies have raised concerns regarding the aggressive strategies employed by existing players and the entry of new competitors, which could lead to increased discounting and affect Zomato's medium-term profitability. As reflected in a recent report, consensus expectations for food growth have now been lowered to 12–15%, indicating a cautious outlook for the sector.
While Zomato’s rebranding to Eternal Limited marks a new chapter, the company has assured stakeholders that the liquidation of Zomato Netherlands will not affect its turnover or revenue. The subsidiary has been inactive, with no significant contribution to the company's overall performance. The total net worth of Zomato Netherlands was reported at ₹32 lakh, and the liquidation process is expected to be completed within a year, pending necessary approvals.
As Zomato navigates these challenges, the company remains focused on enhancing its core food delivery operations. Reports suggest that Zomato may soon report quarterly operating profits for its food delivery segment, a significant milestone that could further bolster investor confidence.
For retail investors, the current market dynamics present both opportunities and risks. Short-term traders are advised to watch for breakouts above ₹220 as a key resistance level, while long-term investors should monitor Zomato’s operating leverage and its ability to maintain margins as it scales. The tech-enabled consumer platform continues to be a focal point for those interested in the evolving landscape of food delivery services.
The recent developments surrounding Zomato not only highlight the company's strategic decisions but also reflect the broader trends impacting the food tech industry in India. As competition intensifies, Zomato's ability to adapt and innovate will be crucial in maintaining its market position.
In summary, while Zomato faces challenges due to heightened competition and valuation concerns, its recent performance and strategic moves indicate a commitment to growth and profitability. Investors will be keenly watching the company's forthcoming quarterly results and operational developments as it seeks to solidify its standing in the market.
