Monday’s trading saw a 6.19 percent increase in Zomato Ltd. shares, which reached a new one-year high of Rs 158.70. After a year of steep increases, the multibagger stock has gained over 200 percent.
Zomato shares, The online food aggregator posted a consolidated net profit of Rs 138 crore for the third quarter of FY24, which ended on December 31, 2023, compared to a net loss of Rs 347 crore for the same period the previous year. Since customers now have to pay to use the food delivery platform, the company’s contribution margin—a crucial profit indicator—has increased from 6.6% in the second quarter (Q2 FY24) to 7.1% in the third quarter (Q3 FY24).
Zomato’s grocery delivery business, Blinkit, saw a more than twofold increase in its gross order value (GOV), or the total value of all orders placed, while its mainstay food delivery business saw a 27% growth for the quarter. As a result, total revenue increased by 69% to Rs 3,288 crore. But Zomato claimed that “muted demand” was the reason for the segment’s lower-than-expected growth in food delivery. The company stated that it anticipates the GOV to rise by more than 20% in the upcoming quarters.
The counter outperformed the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, and 200-day simple moving averages (SMAs) on the technical setup. Its relative strength index (RSI) over a 14-day period was 74.72. Overbought is defined as a value above 70, and oversold is defined as a level below 30.
“Over the past ten months, the stock has seen a respectable rally with a strong uptrend that has been maintained. It has nearly reached the previous peak zone of Rs 169, where resistance may exist. According to Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, “Rs 133 could be seen as a major support zone, and the near-term support would be lying near Rs 146, which needs to be sustained for the bias to remain positive.”
“On daily charts, the Zomato stock price appears bullish but is also overbought, with Rs 162 serving as the next resistance. According to AR Ramachandran from Tips2trades, investors should book profits at current levels because a daily close below the support level of Rs 140 could eventually lead to Rs 128.
The price-to-book (P/B) ratio of the company’s stock is 6.02, while its price-to-equity (P/E) ratio is 112.55.
(Disclaimer: Businessuncover does not offer investment advice; the news it covers about the stock market is provided solely for informational purposes. Before deciding what to buy, readers are advised to speak with a licensed financial advisor.)
