Sunday, May 19

Zomato’s Shares Surge Over INR 100, Smashing Another 52-Week Record High.

Zomato’s Shares Surge Over INR 100, Smashing Another 52-Week Record High.

Zomato share price today: Online food delivery company Zomato’s shares rose to a 52-week high on Monday, holding on to an uprise for the fifth session in a row. Last week, Zomato reported an ahead-of-schedule daily net profit, indicating it was on track to sustained earnings growth. The company has reported net losses for each of the eight diggings since it went public in 2021.

Zomato’s shares rose 7% on Monday after the food delivery platform surprised the street with its first-ever net profit in the June quarter of FY24. Zomato shares jumped as much as 7.77% to hit a 52-week high of ₹102.85 per piece on BSE.
However, analysts believe that Zomato’s share price rally was largely driven by the euphoria of Q1 results where the market story turned positive.
In the current session, Zomato shares opened higher at Rs 97 on the BSE. For the year, the stock is up 83.49% and is up 66% in 2023. The stock touched a 52-week low of Rs 44.35 on January 25, 2023.
A total of 135.54 lakh shares of Zomato changed hands, representing a turnover of Rs 135.82 crore on BSE. The firm’s market capitalization rose to Rs 85,800 crore on the BSE.

From a technical point of view, the relative strength index (RSI) of Zomato stock is at 79.2 which signals that it is trading in an overbought zone. Zomato stock has an annual beta of 1.5, indicating high volatility during the period. Zomato stock is trading above the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages.

The stock’s rally came after Zomato reported net profit for the first time. The food delivery platform posted a profit after tax (PAT) of Rs 2 crore in the June 2023 quarter, against a net loss of Rs 189 crore and Rs 186 crore in the June 2023 quarter and June 2022, respectively.

The company’s consolidated adjusted EBITDA rose to Rs 12 crore for the April-June quarter. In the quarter of last year, however, it reported an EBITDA loss of 152 million crowns. Analysts had expected Zomato to post an EBITDA loss of up to Rs 200 crore this quarter.

 

Shares of Zomato climbed 7.77% to a 52-week high of Rs 102.85 in today's session against the previous close of Rs 95.43 on the BSE. On Friday, the stock rose 14% intraday to Rs 98.39 after Q1 earnings.
Shares of Zomato climbed 7.77% to a 52-week high of Rs 102.85 in today’s session against the previous close of Rs 95.43 on the BSE. On Friday, the stock rose 14% intraday to Rs 98.39 after Q1 earnings.

Most analysts are now bullish on the prospects of Zomato stock.

Aditya Gaggar of Progressive Shares said, “After a stellar IPO, Zomato Ltd touched a high of Rs 169 followed by a correction to Rs 40. the comeback of the Bulls. In the shorter term, stocks appear to be overbought. So any dip towards Rs 90 will be a good opportunity to enter it with a price target of Rs 118. When looking at trend-following indicators such as MACD or ADX, both indicate the presence of a strong trend.

Pravesh Gour, Chief Technical Analyst at Swastika Investmart Ltd said, “The counter is bottoming out and we have also witnessed a breakout of the inverse head and shoulders pattern on the weekly chart. It confirmed its breakout above Rs 90. The overall structure also looks lucrative for long-term investors as it is trading above all important moving averages. MACD (moving average convergence divergence) is supporting current strength, while momentum indicator RSI (relative strength index) is also positively tuned. On the other hand, Rs 100 is a level of psychological resilience; above that, we can expect a rally towards Rs. 114. On the other hand, Rs. 87 is an important level of support in any correction.”

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Kush Ghodasara, an independent market expert (CMT), said, “Zomato recently achieved profitability, which is a positive sign. Their focus on improving margins and implementing a B2B module bodes well for their future prospects. With almost a duopoly in the market, having the highest market share, Zomato is in a favorable position. Expansion into Tier 2 cities and the constant addition of new cities further adds to their promising outlook. Additionally, their instant grocery app, BLINKIT, is gaining popularity, resulting in reduced wastage.

While Zomato saw its food delivery and B2B delivery arm Hyperpure witness significant growth, the same could not be said for Blinkit as the food delivery sector saw a slight halt in growth during the quarter ending June 30, 2023.

The only benefit for Blinkit was that it posted a positive contribution of the month in June, even though the contribution loss for the entire quarter was 14 cr.

This success in the food delivery segment could lead to significant profit growth in the coming months. Technically, Zomat’s breakout above the Rs 85 resistance level on the weekly chart after a year is noteworthy, especially with strong trading volumes supporting the rally. A bullish transition of technical indicators indicates a positive trend. Investors may consider buying Zomato shares at the current market price (CMP) with a target of Rs 165 and a stop loss of Rs 83.”

Also Read: Zomato Q1 Results: At 2 crore, food delivery platform reports net profit for the first time

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