According to the CNBC-TV18 news report, the Directorate General of GST Intelligence (DGGI) has sent tax demands worth over ₹400 crore to Zomato and approximately ₹350 crore to Swiggy. 

As per the report, the DGGI decided to send the tax notices to Zomato and Swiggy as it considers delivery as a service. The taxation body found both the companies liable to pay the Goods and Services Tax (GST) on it for the period stretching between July 2017 and March 2023, the report said.

Also Read: GST notice of ₹400 crore sent to Zomato, ₹350 crore to Swiggy: Report

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On the technical front, Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, said that Zomato stock has been down for four sessions of this week, and is down more than 7% for the week. No major technical reason for the fall, however, profit booking may extend with ₹108 as the next support whereas ₹120 now can act as resistance.

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"There could be consolidation in the near term as the momentum readings are correcting from the overbought zone. The supports are placed around ₹112 and ₹102," added Ruchit Jain, Lead Research Analyst at 5paisa.

For the quarter ended September, Zomato's  net profit came in at ₹36 crore, against a net loss of ₹251 crore in the corresponding period last year. The revenue from operations jumped to ₹2,848 crore, registering a growth of 72 percent, compared to ₹1,661 crore in the year-ago period.

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Jefferies kept its 'Buy' rating on the stock with a target price of ₹165 in its most recent report.

The global brokerage values Zomato's quick commerce at 9x September 25 sales and food delivery business at 52x September 25 Ebitda, resulting in a 1-year price target of ₹165. Increasing competition, slower-than-anticipated market growth, and unfavourable regulations are the main risks, according to Jefferies.

Also Read: Zomato Q2 Results: Net profit at ₹36 crore, revenue up 72% to ₹2,848 crore

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.