Zomato share price gains 1% as it denies of any acquisition plans in unrelated business. Jefferies sees upto 28% upside

livemint.com:

Zomato share prices gained more than 1% as the company denied on any plans to acquire B2B logistics start up Shiprocket. Zomato has remained in spotlight in past few days with news flow pertaining to acquisition of B2B logistics start-up Shiprocket. In the release to the exchanges Zomato said that- There are articles circulating with subject “Zomato offers to acquire Shiprocket for $2 billion".

We deny this statement and would like to caution investors against such incorrect news floating in the market. We remain focused on our existing businesses with no plans for any acquisition at this moment. Also Read- LIC share price jumps over 7% to hit a 52-week high on getting a one-time 25% shareholding exemption from govt The analysts already had remained skeptical about any such development.

Analysts at Jefferies India Pvt Ltd in their December 21st report had said that a diversification seems very unlikely to us at this stage. “We ascribe a low probability of a deal at this stage as management. hands are full with Q/C (quick Commerce) still in ramp-up phase while balancing growth & margin is a key focus in food delivery" said analysts at Jefferies.

Zomato has been acquisitive in the past (especially. in 2021) and made a few investments that were seemingly less relevant, said Jefferies analysts. The company also carries $1.4 billion on its books, with existing businesses not likely to require significant investment.