Sharp Decline in Zomato and Swiggy Shares Raises Investor Concerns
The shares of food home delivery companies Zomato and Swiggy have dramatically declined, causing investors to be concerned.
According to the information received, the shares of Zomato and Swiggy have fallen by about 46% from their highest level.
Many different reasons are being given for the decline in the shares of these companies. These include increased competition, difficulty in making profits and changing market conditions.
Important reasons for the fall in shares
Competition is increasing in the quick commerce sector, in which new players like Zepto are also joining. Due to this the market share of Zomato and Swiggy is under pressure.
According to further information, these companies are also facing difficulty in making profits.
Also, due to a slowdown in consumption, margins are decreasing in the quick commerce segment.
Zomato and Swiggy’s stock has been downgraded by global brokerage firm BofA Securities. Not only this, the target price of the company’s stock has also been reduced.
BofA believes that Zomato may struggle to make profits in food delivery and quick commerce. Also, BofA Securities has reduced the target price of Swiggy from Rs 420 to Rs 325.
Along with this, factors like increases in interest rates and inflation have also affected the market. Which has become the reason for the decrease in investor confidence.
Advice for investors
Investors should keep in mind that investing in the stock market is subject to risks, so do not forget to consult your financial advisor before investing.
Before investing in any company, always analyze its financial position and prospects.
Experts say that there is a possibility of improvement in the shares of these companies in the long run. Be patient when the shares fall, and do not take any decision in haste.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial advice.
Also read: https://investcly.com/gold-prices-surge-again/