Zomato share price rallies 18%, mcap tops Rs 50,000-cr; Here’s what’s fueling the rally. buy, sell, hold?

Zomato share price rallied over 18 per cent to Rs 67.60 apiece on BSE on Tuesday, a day after the company posted a 75 per cent jump in revenue in fourth quarter of FY22

Zomato share price
Zomato's gross order value for the food delivery business grew 6 per cent sequentially and 77 per cent on-year to Rs 5,850 crore in Q4FY22. Image: Reuters

Zomato share price rallied over 18 per cent to Rs 67.60 apiece on BSE on Tuesday, a day after the company posted a 75 per cent jump in revenue in fourth quarter of FY22. The total market capitalisation of Zomato crossed Rs 50,000 crore-mark. The company, in a stock exchange filing, said that the average monthly transacting customers were at an all-time high of 15.7 million in Q4FY22, growing from 15.3 million in the December quarter. Likewise, the average monthly active restaurant partners and delivery partners were at all-time highs as well.

From its high point of 169 to its most recent low of 50, Zomato had witnessed a very steep and ferocious decline which had made the stock deeply oversold, said a technical analyst. “We have witnessed a sharp technical pullback. However, speaking strictly from a technical perspective, investors should not jump in at this price as some consolidation is likely. Also, there is no confirmation of a bottom being in place. At the most, one can just invest a small portion and wait for the prices to settle down,” Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services, told FinancialExpress.com.

The company’s gross order value for the food delivery business grew 6 per cent sequentially and 77 per cent on-year to Rs 5,850 crore in Q4FY22, driven by healthy growth in order volumes while the average order value remained stable. “Positive growth outlook for first quarter of this fiscal, increase in revenue from operations by 75 per cent in previous quarter and increase in average monthly transacting customers were among factors fuelling the rally. One can go for buy on dips as the outlook for the first quarter of FY23 has improved,” Akhilesh Jat, analyst at CapitalVia Global Research, told FinancialExpress.com.

In traded volume terms, a total of 65.02 lakh shares exchanged hands on BSE, while 12.92 crore scrips traded on National Stock Exchange (NSE), so far in the day. AR Ramachandran, Co-founder & Trainer, Tips2Trades, told FinancialExpress.com that despite widening losses in Q4FY22, an increasing customer base coupled with a technical bounce back from oversold levels has led to a sharp uptrend in Zomato today. “Technically, 60 now acts as a good support. Consistent daily close above 66 should lead to 74-78 in the coming days,” Ramachandran advised investors.

The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.

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