Shares of online food aggregator Zomato fell sharply on Wednesday amid heavy volumes, tracking overall weakness in the domestic benchmarks. The stock today plunged 8.25 per cent to settle at Rs 47.80 over its previous close of Rs 52.10. Around 154.22 lakh shares changed hands today on BSE, which was more than four times higher compared to Zomato's two-week average volume of 36.25 lakh shares. Turnover on the counter stood at Rs 73.86 crore, commanding a market capitalisation (m-cap) of Rs 40,877.34 crore.
An analyst suggested that Zomato could fall near the Rs 42 level if the counter settles below its support zone of Rs 48, a level it breached today. Another analyst advised investors to exit the stock due to continuous selling pressure.
Ravi Singh, Vice-President and Head of Research at Share India, said, "Zomato is under continuous selling pressure. Each and every factor is working against the stock. The weakness in benchmark indices has also contributed to the correction. Investors are advised to exit the stock which may fall up to Rs 42 levels in the coming days.
AR Ramachandran from Tips2trades said, "Zomato has strong support at Rs 48 on the daily charts. A close below this support could trigger a further decline toward the Rs 41.8 level. Strong resistance will be at 52."
The stock today traded lower than 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 28.01. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 85.78.
That said, Zomato has an average target price of Rs 67, Trendlyne data showed, suggesting a potential upside of 40.31 per cent. The stock has a one-year beta of 1.62, indicating high volatility.
Further, exchanges today sought clarification from the food aggregator with reference to a report quoting "Zomato stops 10-minute food delivery offering." Zomato is yet to issue a statement.
Meanwhile, Indian equity benchmarks fell sharply today, dragged by banks, financials and energy stocks. The 30-share BSE Sensex pack slumped 774 points or 1.27 per cent to settle at 60,205, while the broader NSE Nifty index moved 226 points or 1.25 per cent down to close at 17,892.
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