Shares of online food aggregator Zomato slipped more than 2 per cent on Friday, snapping their winning run of three straight sessions. The stock fell 7.45 per cent to hit an intraday low of Rs 50.35. It eventually settled 2.02 per cent lower at Rs 53.30 today against a previous closing of Rs 54.40. Around 1.26 crore lakh shares changed hands today on BSE, which was higher than the two-week average volume of 73.15 lakh shares. Turnover on the counter stood at Rs 66.32, commanding a market capitalisation (m-cap) of Rs 45,580.80 crore.
Considering today’s closing level of Rs 53.30, the counter traded 31.44 per cent higher from its 52-week low of Rs 40.55, hit on July 27, 2022. That said, Zomato has slumped 44.07 per cent from its one-year high level of Rs 95.30, touched on February 10 last year.
Zomato’s net loss widened to Rs 346.60 crore year-on-year (YoY) for the quarter that ended December (Q3FY23) against a loss of Rs 63 crore in the year-ago period. The firm had reported a net loss of Rs 250.80 crore in the previous September quarter.
On the flip side, the online food aggregator’s consolidated revenue from operations rose 75.20 per cent to Rs 1,948 crore in Q3 FY23.
Resistance on the counter could be seen at Rs 53.60, followed by Rs 54.4 and Rs 56 levels, analysts said.
Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, said, “Zomato is in a secular downtrend and is hovering below its major moving averages on the daily chart, indicating inherent weakness. At the current juncture, the stock has a series of resistances starting from Rs 53.60 to the Rs 56-odd zone, followed by the bearish gap of Rs 59.55-59.80. On the flip side, Rs 46-46.50 is likely to cushion any fall, while any further could disrupt its recent move, and it may plunge to lower levels in a comparable period.”
Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “The free fall in Zomato’s share price, which started between November 2022 and January 2023, got arrested around Rs 46-48 levels. Moreover, the entire free fall accounted for a 40 per cent cut in price. One can buy in a small tranche around Rs 53-54 and Rs 51-52 levels for a target up to Rs 62, keeping a stop loss placed at Rs 48.”
AR Ramachandran from Tips2trades said, “Widening losses in Q3 FY23 results has expectedly led to a fall in Zomato stock price today. Support of Rs 51 is very important on the daily charts. A close below this level could lead to lower targets of Rs 48-42.5 in the near term. Resistance will be at Rs 54.4.”
The stock traded higher than the 5-day and 20-day moving averages but lower than the 50-day, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 52.36. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a negative price-to-equity (P/E) ratio of 89.57.
Zomato has an average target price of Rs 67, Trendlyne data showed, suggesting a potential upside of 25.70 per cent. The scrip has a one-year beta of 1.47, indicating low volatility on the counter.
Meanwhile, Indian equity benchmarks slipped today, dragged by metals, consumer goods, energy and technology stocks.
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