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Shares of restaurant aggregator and food delivery company Zomato fell on Tuesday. Why?

There was great turmoil in the trading session. The shares plunged by 6 per cent in early trade and at 2:30 pm it was trading down by more than 4 per cent. Let us tell you that a day before

On Monday itself, Zomato has released the results for the March quarter of its business year 2024. The results of Zomato, which turned into profit from loss, were so good that the company's stock touched its 52-week high of ₹ 7.20 paise on Monday. Along with the results, the outlook of most of the brokerage firms is bullish on this stock. But despite this, read this article till the end to know what was the main reason behind the fall of the stock and what is the prediction of the brokerage houses after the results.

Shares of restaurant aggregator and food delivery company Zomato fell on Tuesday. Why?

Zomato's quarterly results released on Monday, huge profit of Rs 175 crore, followed by 52 weeks high. This touched Zomato's day on Monday but as soon as the market opened on Tuesday, Zomato's shares fell face down. Let us try to understand what was the reason behind this.

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Along with the results, the company gave information about its future plans. It was told by the food delivery company that it has planned to issue 18.2 crore new shares through the Employee Stock Option Plan i.e. eShop. The total value of these shares at the current market price is around Rs 3500 crore. the company has now the approval of the shareholders has been sought on this plan.

Employees usually receive these shares within a few years of a new SOP plan being approved. In fact, it has increased in the last few years, whereas in the same period a year ago it was Rs. 84 crore. One reason for the fall in the stock on Tuesday is said to be the increase in the company's cost in the current financial year. In the current financial year, costs may increase due to the eShop being given to the leadership team of Blinked and its senior employees.

The effect of this was visible in the stock market today. Apart from this, Blink is aggressively working on a plan to expand stores. Blinked had 525 dark stores in the month of March. There are preparations to increase it beyond 1000 after the end of the current financial year. The company plans to do most of its store expansion in top eight locations. In such a situation, the market has considered it quite aggressive and is seeing the near turn of opening 500 new stores in the financial year 2025 as a burden on profitability.