After analysts expected an up to 50 percent upside in Zomato stock price (from yesterday's closing price) with the food tech platform shifting its focus to growth, the firm's shares traded in the green on February 24. At 10:27 am, Zomato shares were trading 1.46 percent higher at Rs 55.75 on BSE than the previous day.

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Brokerage Morgan Stanley said that Zomato's pilot of home-cooked meals at an affordable price in Haryana’s Gurugram would increase the company’s total addressable market and contribution profit pool but dilute profit per order.

The brokerage also pointed out that this was an experiment, which could be closed if it "doesn’t work out". Morgan Stanley has an overweight rating on the stock with a target price of Rs 82 per share.

Global brokerage Citi, meanwhile, said Zomato was doubling down on its Gold loyalty programme and such programmes are a strong medium-term value engine if it leads to a decline in churn and an increase in frequency.

Reflecting on the third gross order value (GOV), the brokerage said, in the October to December quarter, there was a 50 basis points negative impact sequentially on the contribution margins ex-ante. Citi has a buy rating on the stock with a target price of Rs 76 per share.

Zomato's rival Swiggy, too, has added features and extended terms for existing members.

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Zomato announced the launch of 'Zomato Everyday', a home-style meal offering earlier this week. This is the remodelled offering of its 10-minute food delivery service that the company suspended in January, less than a year after it launched it as a pilot in Gurugram.

"We are working on remodelling the Zomato Instant service to focus on offering our customers home-style cooked meals at affordable prices (will be called Zomato Everyday)," CEO Deepinder Goyal said in the shareholder letter while announcing results for the December quarter of FY23.

The latest offering, Zomato said, will see its food partners collaborate with home chefs who will design meals starting from Rs 89, which the company says will be delivered "within minutes".

Though Goyal said in the letter that there was a large opportunity in a market like India for a service like this, Swiggy’s launch of a separate app for home-style meals in 2019 called "Swiggy Daily" as an experiment didn’t take off as planned and was shut down within a year in 2020 owing to weak demand. Another app that shut down in the space was Holachef.

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