Zomato shares yet to reclaim 52-week high post Q1 earnings but analysts are bullish; here's why

Shares of online food delivery provider Zomato Ltd have climbed 16% since the firm announced its Q1 earnings. The stock, which closed at Rs 84.9 on August 2, 2023 rose to a high of Rs 98.49 on BSE today. Zomato announced its Q1 earnings during market hours on August 3. Since then, the stock has gained Rs 13.59 or 16% from the August 2 closing level on BSE.  

Zomato reported a net profit for the first time in Q1. The food delivery platform logged a profit after tax (PAT) of Rs 2 crore in the June 2023 quarter against a net loss of Rs 189 crore and Rs 186 crore in the March 2023 quarter and June 2022 quarter, respectively. The consolidated adjusted EBITDA of the company rose to Rs 12 crore for the April-June quarter. However, it posted a EBITDA loss of 152 crore in the year ago quarter. Analysts were expecting Zomato to report an EBITDA loss of up to Rs 200 crore in this quarter. 

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Buoyed by the positive set of earnings, the stock zoomed 7.77% to a 52-week high of Rs 102.85 on August 7 against the previous close of Rs 95.43 on BSE.  

Since August 7, the stock has hit Rs 100 mark intraday in just three sessions (August 8, August 30 and August 31).  

In the current session, the Zomato stock opened higher at Rs 98.49 on BSE. It hit an intraday high of Rs 98.49. It also slipped to a low of Rs 96.81 during the session. In a year, the stock has risen 56.08% and climbed 62% in 2023. The stock hit a 52-week low of Rs 44.35 on January 25, 2023.   

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Total 16.74 lakh shares of Zomato changed hands amounting to a turnover of Rs 16.33 crore on BSE. The market cap of the firm rose to Rs 83,893 crore on BSE.   

In terms of technicals, the relative strength index (RSI) of Zomato stock stands at 64.2, signaling it's trading neither in the overbought nor in the oversold zone. Zomato stock has a one-year beta of 1.5, indicating high volatility during the period. Zomato stock is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.    

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Here’s a look at what analysts said on the outlook of the stock. 

Gaurav Bissa, VP, InCred Equities said, "Zomato witnessed a double bottom breakout on the weekly charts and confirmed the pattern after closing above the neckline placed at Rs 75 levels. Since then, the stock has been consistently inching higher with formation of higher highs and higher lows implying the stock is in a strong uptrend. The stock has an immediate hurdle at Rs 100 levels and a close above this will trigger a breakout on candlestick charts as well as a bullish abc pattern follow through breakout, which can push the stock towards Rs 112 levels." 

Abhijeet from Tips2trades said, "Zomato is bullish but also overbought on the daily charts with next resistance at  Rs 108.65. Investors should book profits at current levels as a daily close below the support of Rs 96 could lead to a target of Rs 87 in the near term." 

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Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said,“The stock has resistance zone near  Rs 102 levels and would need a decisive breach above that zone for indicating a breakout and carry on the momentum still further ahead for next target of  Rs 114-115 levels. The near-term support will be near Rs 90 and only a decisive breach below that would turn the trend weak.”

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