In Monday’s BSE trading session, Zomato, the food delivery platform, experienced a notable surge, with its shares rallying 8% and surpassing the INR 100 milestone. Additionally, the stock achieved a fresh 52-week high, reaching INR 102.8.
Following Zomato’s attainment of profitability in Q1 FY24, its shares experienced a significant surge. The company reported a consolidated net profit of INR 2 crore for the quarter ended June 2023, marking a notable improvement compared to a loss of INR 186 crore in the corresponding quarter of the previous financial year. Notably, in the quarter ended March, the company had reported a loss of INR 189 crore.
Read More: Zomato turns profitable in Q1 FY24, reports INR 2 Cr consolidated PAT
During the reporting quarter, Zomato’s revenue from operations amounted to INR 2,416 crore, indicating a remarkable year-on-year growth of almost 71%. This substantial increase was in contrast to the company’s revenue of INR 1,414 crore reported during the same period in the previous year.
Gaurav Bissa, VP at InCred Equities, said, “Zomato has seen a very strong upmove from 58 levels when it triggered a buy signal in the Ichimoku setup. The stock has been forming higher highs and higher lows on the daily charts since Jan 2023 implying short-term trend reversal.”
“Investors are advised to buy the stock on declines towards 80 for a target price of 120-140 whereas existing shareholders can use 75 as trailing stop-loss,” Bissa said.
Meanwhile, Pravesh Gour, Senior Technical Analyst at Swastika Investmart, said, “The counter is bottoming out and has also witnessed a breakout of an inverse head and shoulders formation pattern on the weekly chart. It has confirmed its breakout above INR 90. The overall structure also looks lucrative for long-term investors as it trades above all-important moving averages.”
“MACD supports the current strength, whereas the momentum indicator RSI is also positively poised. On the upside, INR 100 is the psychological resistance level; above this, we can expect a rally towards INR 114. On the downside, INR 87 is an important support level during any correction,” Pravesh said.
Commenting on the Q1 earnings and his address to the investors, Managing Director and CEO Deepinder Goyal said, “We have been working hard to make our business less complex, and putting the right people at the right spots within our businesses. These things do not have definite/measurable impact, and I can in hindsight say that most of our seemingly “risky” bets have changed the trajectory of the business significantly, much faster than we expected”.
On the issue of profitability, Akshant Goyal, Chief Financial Officer said that he expected the business to remain profitable going forward. “Knowing what we know today, we believe we will continue to deliver 40%+ YoY topline (Adjusted Revenue) growth for at least the next couple of years,” Goyal said.
