The stock price of Zomato Ltd., the leading food delivery app of India, fell up to 8.4 per cent on Friday after the Indian meal delivery company reported lackluster sequential gross order value growth (GOV) in the third quarter as more people dined out after pandemic restrictions were lifted.

After the market closed on Thursday, Zomato reported that its third-quarter GOV – the total monetary value of all food delivery orders – increased 84.5 per cent year on year, but only 1.7 per cent sequentially as eating out restrictions were loosened.

People had become addicted to having meals and goods delivered to their houses since the country fell under lockdown in March 2020.

Brokerage Jefferies reduced Zomato’s gross merchandise value outlook for the full year 2022-26 by 4 per  cent -9 percent, citing the previous two quarters as evidence of how volatile this firm (and possibly the internet sector) is likely to be.

“Earnings release remains opaque, lacks substance, and describes only selective aspects of the business,” Jefferies added, slashing target price to 120 rupees from 175 rupees while retaining a “buy” rating on Zomato stock.

As of 0432 GMT, the delivery company’s stock was trading at 88.6 rupees per share.

Zomato’s consolidated net loss shrank to 632 million rupees ($8.38 million) in the December quarter, down from 3.53 billion rupees the previous year, thanks to a 3.16 billion rupee one-time gain from the sale of its investment in Fitso, an online platform that helps people identify sporting venues.

Zomato, which made its market debut in 2021, announced on Thursday that it will raise the upper limit of its prospective investments in the rapid commerce industry over the next two years to $400 million.

The race for rapid commerce and hyperlocal delivery in India is heating up. Google and Reliance Industries have both invested in Bengaluru-based Dunzo, while Zomato has invested in its competitor.

(Adapted from DealStreetAsia.com)