Zomato Shares Surge to 18-Month High, Breach Rs 100 Mark: What Lies Ahead?

Rajesh
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Zomato, the leading online food delivery provider, has made a remarkable comeback as its share price reaches an 18-month high, crossing the crucial Rs 100 mark. This surge comes on the heels of its impressive Q1 earnings, showcasing a remarkable turnaround for the company.

Zomato Shares Surge to 18-Month High, Breach Rs 100 Mark
Zomato Shares Surge to 18-Month High,
Breach Rs 100 Mark

In today's trading session, Zomato shares soared by 7.77%, hitting a 52-week high of Rs 102.85, a significant climb from the previous close of Rs 95.43 on the BSE. The stock's resurgence has been a long-awaited event, with its price last closing at Rs 100.50 on January 25, 2022.

The surge in Zomato's stock has been fueled by the company's robust financial performance. After experiencing losses in previous quarters, the food delivery giant reported a net profit of Rs 2 crore in the June 2023 quarter, marking its first-ever profit. This achievement is a stark contrast to its net loss figures of Rs 189 crore and Rs 186 crore in the March 2023 quarter and June 2022 quarter, respectively.

The positive momentum is further bolstered by Zomato's strong trading volumes. The company's stock opened higher at Rs 97 in the current session, reflecting an 83.49% increase over the past year and a 66% climb in 2023 alone. This upward trajectory has positioned Zomato as a notable player in the market, with its market capitalization reaching Rs 85,800 crore on the BSE.

Technical indicators also indicate a bullish trend for Zomato's stock. The relative strength index (RSI) stands at 79.2, indicating an overbought condition, and the stock's performance has consistently outperformed its moving averages over the short, medium, and long term. Additionally, Zomato's one-year beta of 1.5 highlights its high volatility, making it an intriguing prospect for investors seeking dynamic opportunities.

Market analysts are voicing their optimism for Zomato's future prospects. Aditya Gaggar from Progressive Shares emphasizes the stock's recent breakout and suggests a potential entry point around Rs 90 with a target price of Rs 118. Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd, identifies key support and resistance levels, projecting a rally toward Rs 114 if the stock breaches Rs 100.

Kush Ghodasara, Independent Market Expert, highlights Zomato's profitability and strategic expansion, particularly its grocery delivery app BLINKIT. With a favorable market position and growing presence in Tier 2 cities, Zomato's stock is poised for further growth, potentially reaching Rs 165 according to Ghodasara's analysis.

Osho Krishan, Sr. Analyst at Angel One, notes Zomato's impressive recovery and advises cautious optimism as the stock approaches the critical Rs 100 resistance level. A breakthrough could lead to further gains, but Krishan also warns of the possibility of profit booking, emphasizing the importance of monitoring support levels in the Rs 90-80 range.

Abhijeet from Tips2trades suggests that while Zomato's Q1FY24 results have boosted its stock price, overbought conditions on daily charts and potential support levels should be closely watched by investors.

As Zomato's shares hit an 18-month high and reclaim the coveted Rs 100 mark, market dynamics and strategic moves will determine the trajectory of this promising stock in the coming months.

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