Zomato shares extend gains, jump 6% to scale fresh one-year high

Shares of Zomato Ltd surged 6.19 per cent to hit their new one-year high level of Rs 158.70 in Monday's trade. The multibagger stock has rallied more than 200 per cent in the past one year.

The online food aggregator reported a consolidated net profit of Rs 138 crore for the third-quarter ended December 31, 2023 (Q3 FY24), as against a net loss of Rs 347 crore in the year-ago fiscal.

The company's contribution margin - a key profit metric - expanded to 7.1 per cent in Q3 FY24 from 6.6 per cent in the second-quarter (Q2 FY24) due to the introduction of a fee for customers to use the food delivery platform.

Zomato's gross order value (GOV) - the total value of all orders placed - at Blinkit, its grocery delivery business, more than doubled, while its mainstay food delivery business grew 27 per cent for the quarter. This helped total revenue jump 69 per cent to Rs 3,288 crore.

Zomato, however, said growth in its food delivery segment was below its expectations due to "muted demand". The company expects the GOV to increase more than 20% in the coming quarters, it said.

On technical setup, the counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 74.72. A level below 30 is defined as oversold while a value above 70 is considered overbought.

"The stock has witnessed a decent rally with strong uptrend maintained in the last 10 months and has almost reached near the previous peak zone of Rs 169, where it can find resistance. Rs 133 could be considered 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," said Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher.

"Zomato stock price looks bullish but also overbought on daily charts with next resistance at Rs 162. Investors should book profits at current levels as a daily close below support of Rs 140 could lead to Rs 128 in the near term," said AR Ramachandran from Tips2trades.

The company's stock has a price-to-equity (P/E) ratio of 112.55 against a price-to-book (P/B) value of 6.02.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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