The shares of food aggregator Zomato Limited have been on an uptrend after hitting their 52- week low of ₹ 40.60 in July this year. Its share price plummeted as market participants expected a huge sell-off after the expiry of the one-year lock-in period for its promoters and early investors.
Zomato’s shares have risen from ₹ 40.60 to ₹ 69.25, up 70.57% in the past 15 trading sessions. However, it is still below its issue price of ₹ 73 per equity share.
Stock market experts say that Zomato reported better than estimated Q1FY23 numbers. The company’s management has promised to break even in the next four quarters. Its consolidated loss narrowed to ₹185.7 crores in the June quarter, as against a loss of ₹ 359.7 crores in the previous quarter. Further, it has halted Zomato Wings which was incepted in November 2021 to facilitate equity funding for restaurants and cloud kitchens.
When Zomato’s shares took a beating in July, it emerged as the most bought stock in July by asset management companies (AMCs). HDFC AMC, UTI AMC, and Nippon AMC were a few mutual fund houses that invested heavily in the stock.
HDFC AMC’s holding increased from 14 lakh shares in June to 1.13 crores shares in July. Similarly, Nippon AMC increased its holdings from 2.49 crore shares to 9.51 crore shares and UTI AMC from 3.11 crore shares to 3.49 crore shares
“Zomato shares are currently trading in the range of ₹48 to ₹70. So, those who have this stock in their portfolio are advised to hold the stock and exit around ₹70 levels. The stock is currently range bound and bullish or bearish trend in the scrip can be decided only on the breakage of either side of the current range,” Anuj Gupta, Vice President — Research at IIFL Securities.
Jefferies had given a buy call on the shares of the company with a target price of ₹ 100 apiece. Further, Credit Suisse had an outperform rating with a target price of ₹ 90 and Kotak Institutional Securities believed that the worst is over for the stock and had suggested a buy with a target price of ₹ 79, in July this year.
Valuation guru Ashwath Damodaran pegged Zomato at ₹35.32. A year ago, he had pegged its value at ₹ 41.
Written by Simran Bafna
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
