On Tuesday, shares of online food aggregator Zomato Ltd fell from record highs, halting a three-day winning streak. The stock declined 5.09 percent, closing at Rs 217.45. At this price, it was down 6.27 percent from its record high of Rs 232, set a few sessions ago on July 15. Despite the aforesaid decrease, the multibagger stock had gained 171.20 percent in the last year.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said the stock was one of the outperformers, returning more than 170 percent in a year. Given the company's futuristic business plan, he urged that investors with a high risk tolerance buy this stock on dips. Technically, support for the counter might be seen at Rs 200, followed by Rs 190. Also, resistance may be encountered in the Rs 225 range.
Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, stated, "Zomato has been on a roll since hitting the Rs 200 mark. The stock has reached overbought level, and the recent pullback or profit-taking should be interpreted as a positive move in the current upward trend. In the short term, the Rs 200 zone is projected to serve as intermediate support, with strong support around the bullish gap of Rs 190. On the upside, there are no clear resistance levels."
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking also highlighted, "Following its rapid upward surge, the stock had some pullback. It may fall towards Rs 200 in the near future. On the higher end, resistance will be at Rs 225, and a decisive close above this level can only signal the next phase of the rally."
Last month, Zomato responded to a news about acquiring Paytm's movie and events division. "We acknowledge that we are in discussions with Paytm for the aforementioned transaction, however, no binding decision has been taken at this stage that would warrant a Board approval and subsequent disclosure in accordance with applicable law," it stated in a BSE filing. The meal delivery platform reported a consolidated net profit of Rs 175 crore in the fourth quarter (Q4 FY24), up from a loss of Rs 189 crore the previous year.
Zomato's operating revenue in Q4 FY24 was Rs 3,562 crore, up from Rs 2,056 crore the previous year. The company also stated that its Blinkit (quick commerce) segment achieved adjusted EBITDA profitability in March 2024. Meanwhile, Indian equities benchmarks were closed today for Muharram. The domestic bourses will reopen on Thursday, July 18, 2024.
