MUMBAI: Online food delivery company Zomato's shares extended its morning session loss on Tuesday up to 5-6 percent, as the company is expecting an increase in cost due to the employee stock ownership plan (ESOP).
Zomato announced results of the fourth quarter of the financial year 2024 on Monday.
In the post-result commentary, the management said that in the current financial year (FY25), the costs may increase due to the grant of ESOPs to senior employees and the leadership team of Blinkit.
The food delivery giant said they had sought permission from the shareholders to issue 18.2 crore shares to the employees as ESOP.
According to the current market value, ESOPs' value is around Rs 3,500 crore.
Zomato registered a profit of Rs 175 crore in Q4 of FY24. The company reported a loss of Rs 188 crore in the same period last year.
After the result, brokerage firm Emkay Global maintained a buy rating on Zomato with a target price of Rs 230 per share.
"Zomato posted steady operational results, with revenue ahead of our estimates whereas the margin miss was on account of higher than expected ESOP costs (for the Blinkit leadership team)," said the brokerage firm.
"Food delivery gross order value (GOV) grew 28.5 per cent YoY to Rs 84.4 billion (-0.6 per cent QoQ), with Blinkit GOV up 13.7 per cent QoQ/96.8 per cent YoY to Rs 40.3 billion. Blinkit achieved operational EBITDA break-even in March 2024," it added.