In a recent development, food delivery giant Zomato finds itself navigating through choppy waters as it faces both internal allegations and regulatory challenges.

Employee Allegations Surface

Shashank Shukla, a Zomato employee who joined the company in February, has publicly alleged on LinkedIn that the company is engaging in unethical behavior. Shukla claims that Zomato is removing employees without their consent, failing to consider personal circumstances, and that senior leadership is acting without accountability.

In his post, which tagged Zomato CEO Deepinder Goyal and other company leaders, as well as group brands Hyperpure and Blinkit, Shukla stated that he had personally experienced such an incident. He mentioned that he had already escalated these issues internally via email before making the public post.

When contacted about these allegations, Zomato declined to comment on the matter.

GST Demand Orders

Adding to the company's challenges, Zomato, now known as Eternal Limited, has received three Goods and Services Tax (GST) demand orders from the Joint Commissioner, Appeals-4, Bengaluru. These orders, received on August 25, cover the period from July 2017 to March 2020.

The details of the GST demand orders are as follows:

The total GST demand amounts to ₹1718.93 lakh, with an additional ₹2142.00 lakh in interest and ₹172.19 lakh in penalties.

Company's Response

Eternal Limited (formerly Zomato Limited) has stated that they believe they have a strong case on merits, backed by views from their lawyers. The company plans to file appeals against these orders before the appropriate authority.

As the food delivery giant grapples with these internal and external challenges, stakeholders will be closely watching how the company addresses both the employee allegations and the regulatory demands in the coming days.

Zomato, the popular food delivery and quick commerce platform, has achieved a significant milestone in its market performance, overtaking the aerospace giant Hindustan Aeronautics Limited (HAL) in terms of market capitalization. This surge comes on the heels of Zomato's impressive first-quarter financial results.

Market Capitalization Milestone

Zomato's market capitalization has reached Rs 3.10 lakh crore, edging past HAL's Rs 3.00 lakh crore. This remarkable achievement underscores the growing investor confidence in the food tech sector and Zomato's business model.

Q1 Financial Highlights

The company reported a robust 23% quarter-on-quarter increase in revenue, reaching Rs 7,167.00 crore. This figure surpassed analyst estimates of Rs 6,624.00 crore, demonstrating Zomato's strong performance in the food delivery and quick commerce segments.

However, it's worth noting that Zomato's net profit experienced a 36% sequential decline, settling at Rs 25.00 crore for the quarter.

Stock Performance

Zomato's stock has shown remarkable momentum in recent weeks:

• The share price has climbed nearly 20% in the past month
• It rose from Rs 256.00 to Rs 322.00

This upward trajectory reflects growing investor optimism about Zomato's business prospects and market position.

Comparison with HAL

While Zomato celebrates its market cap milestone, it's important to note the contrasting performance of Hindustan Aeronautics Limited:

• HAL reported a 4.1% year-on-year decline in consolidated net profit to Rs 1,377.00 crore
• The company's stock has seen a 3.80% decrease in the past month, dropping from Rs 4,651.00 to Rs 4,475.00

Analyst Perspective

UBS, a global financial services firm, has reduced HAL's valuation multiples, citing several factors:

• Execution challenges
• Margin risks
• Lack of new large orders until financial year 2028

Corporate Governance Update

In a recent development, Zomato, now known as Eternal Limited, held its 15th Annual General Meeting (AGM). Key resolutions passed at the AGM include:

1. Re-appointment of Deloitte Haskins & Sells as Statutory Auditors for a second term of 5 years
2. Appointment of Chandrasekaran Associates as Secretarial Auditors for 5 consecutive years

These appointments reflect Zomato's commitment to maintaining strong corporate governance practices as it continues its growth trajectory.

The contrasting fortunes of Zomato and HAL highlight the dynamic nature of India's stock market, where technology-driven platforms are increasingly gaining favor among investors. As Zomato continues to expand its services and market reach, it will be interesting to see how this impacts its long-term market position and financial performance.