Shares of Zomato Ltd extended their fall for the third consecutive session in Wednesday's trade. The stock slipped 5.05 per cent to hit a day low of Rs 203.80. At this price, it has corrected 33.07 per cent from its record high level of Rs 304.50, seen December 5 last year.
The quick-commerce stock started falling after posting a 57.24 per cent drop, year-on-year (YoY), in its consolidated net profit for the December 2024 quarter (Q3 FY25). During the quarter under review, profit slipped to Rs 59 crore from Rs 138 crore in the year-ago period. However, revenue from operations surged 64.39 per cent to Rs 5,405 crore in Q3 FY25 as against Rs 3,288 crore in the corresponding period last fiscal.
Zomato said its bottomline (adjusted EBITDA) grew 128 per cent YoY, however, on a QoQ basis, adjusted EBITDA fell 14 per cent due to investments in expedited new store openings and new customer acquisition on quick commerce business.
A few analysts largely remained divided on the counter. One advised investors to start buying it around Rs 210-200 levels and keep adding on dips while the other analyst said only those with a high-risk market appetite should consider holding on to the stock.
"We maintain our positive stance on Zomato with an expected target price of Rs 280. In the fourth quarter (Q4 FY25), you will have a pleasant number to look at rather than what the market understands now. If you got the stock at higher levels, average it around Rs 210-200 in a phased manner. For fresh investment, don't go all out. Start at the current market price and possibly add again on dips. It is a sizeable opportunity to look at Zomato from a long-term view," Gaurang Shah, Senior VP at Geojit Financial, told Business Today.
"Zomato is a futuristic stock and the company has to improve its revenue parameters. The market is expected to be apprehensive in the medium- to short-term. Investors with a high-risk appetite can consider holding on to the stock," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
On technical setup, the counter traded lower than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 28.22. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The stock has a price-to-equity (P/E) ratio of 114.24 against a price-to-book (P/B) value of 7.73. Earnings per share (EPS) stood at 1.85 with a return on equity (RoE) of 7.38.