Zomato shares soared 67% in six months; time to buy, sell or hold?

Shares of online food aggregator Zomato Ltd have gained 67.26 per cent in the past six months and 52.55 per cent in 2023 so far. The stock on Tuesday rose 2.44 per cent to close at Rs 91.91. At today's closing price, the scrip has slipped 10.64 per cent from its 52-week high of Rs 102.85, a level seen on August 7, 2023. Although, the multibagger counter has gained 107.23 per cent from its one-year low price of Rs 44.35, hit on January 25 this year.

Technical analysts largely believe the stock may revisit its 52-week high price but could face resistance around the said level. Also, one should not rule out the possibility of profit booking at higher levels following the recent stellar show.

Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One, said, "Zomato has strongly recouped from the lows in the current financial year and since then, it has followed the cycle of higher highs-higher lows. At present, the stock is heading to the crucial resistance zone of Rs 100 and a decisive breakthrough would only dictate the next leg of the rally towards the potential resistance of Rs 120-odd level from a short to medium-term perspective. However, post the recent stellar rally, one should not become complacent as the possibility of cool-off or profit booking is higher. On the lower end, a series of support could be seen around Rs 88-80 in the comparable period. One needs to have a pragmatic approach and should keep a close tab on the mentioned levels."

Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher, said, "The stock has gradually picked up momentum. The stock, which recently took support near Rs 88, has once again indicated a bullish candle to improve the bias. One can anticipate a rise for a near-term target of 100-102 levels. The overall trend is maintained strong. Only a decisive breach below Rs 83 would weaken the trend."

Kush Ghodasara, independent market expert, CMT, said, "Zomato's stock exhibited a decisive breakout above Rs 85 level, followed by a period of consolidation on low volumes. Today's rebound near the 10-day average, at Rs 91, signals a potential short-term opportunity. One can aim for a target of 108, keeping a stop loss placed at Rs 89."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "The stock is in a well-established uptrend. Rs 88 is the credible support zone and resistance could be seen near Rs 103 level."

AR Ramachandran from Tips2trades said, "Zomato is slightly bullish on the daily charts with next resistance at Rs 99.90. A daily close below support of Rs 90.50 could lead to target of Rs 80 in the near term."

VLA Ambala, research analyst at Stock Market Today, said, "Zomato found support at 20-day EMA. We can expect more upside targets between Rs 100 and Rs 150. Keep strict stop loss at Rs 85."

Market expert Ravi Singh said, "Zomato is in bullish trend taking cues from the improved financial numbers in June quarter (Q1 FY 2023-24). The stock is trading above its short- and long-term MAs, which suggests a strong uptrend inherit in the counter. The momentum indicators are also in support of the current trend. We may see an up move for a target of Rs 100 in coming trading sessions."

The food delivery platform reported a consolidated net profit of Rs 2 crore in Q1 FY24 against a loss of Rs 186 crore in the corresponding quarter of the last financial year. The company's revenue from operations stood at Rs 2,416 crore in June 2023 quarter, which was up nearly 71 per cent, year-on-year (YoY) against Rs 1,414 crore reported in the year-ago period.

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