Zomato, the online food aggregator, witnessed a 3% decline in its share price, ending its five-day winning streak. Analysts have highlighted potential support around Rs 70-75 and resistance in the Rs 85-90 range. While the stock’s recent earnings and global business restructuring have instilled investor confidence, experts hold varying opinions on its future trajectory.
Shares of Zomato Ltd experienced a setback, slipping 3% after a five-day climb. The stock closed at Rs 80.18, down 2.78% from its previous close of Rs 82.47. Despite this decline, the stock has gained 33.08% in 2023 and 49.59% over the past year. Analysts credit the company’s strong earnings performance and global business restructuring for boosting investor confidence.
Technical analysis suggests that Zomato may find support around the Rs 70-75 levels, while facing resistance in the Rs 85-90 zones. Analysts predict that the stock could potentially surpass the Rs 100 mark by the end of 2023.
Osho Krishan, Senior Analyst at Angel One, emphasized the positive outlook for Zomato, stating that the stock has displayed a price volume breakout above the Rs 73-75 levels. In the short term, the stock is expected to find support in the Rs 73-70 range and encounter strong resistance in the Rs 85-90 zones.
Vaishali Parekh, Vice-President – Technical Research at Prabhudas Lilladher, noted that Zomato witnessed a significant increase in price from the consolidation phase around Rs 75, reaching resistance near Rs 85 before experiencing some profit booking. The stock currently has near-term support around Rs 78, and a move below Rs 73.50 could weaken the overall trend, potentially leading to further decline.
Ganesh Dongre, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, highlighted the recent breakout above Rs 78 after consolidating in the price zone of Rs 70-78. Dongre suggested that traders could hold the stock with a target price of Rs 94 in upcoming sessions, using a stop loss at Rs 70.
Ravi Singh, Vice-President and Head of Research at Share India, indicated that Zomato’s latest earnings growth has increased investor confidence, and the momentum indicators suggest an uptrend towards the Rs 90 levels in the near term.
AR Ramachandran from Tips2trades mentioned that Zomato appears bearish and overbought on the daily charts, with the next resistance at Rs 85. A daily close below Rs 80.50 could lead to a target of Rs 73 in the near term.
Milan Sharma, Founder and MD of 35North Ventures, expressed optimism about Zomato’s business model, expecting it to grow in the future. While operating margins improved in the last quarter, the long-term sustainability and further improvement of operating margins remain to be seen. Milan advised potential buyers to wait for a dip and enter around Rs 75.
Vaibhav Kaushik, Research Analyst at GCL Broking, acknowledged Zomato’s positive performance over the past six months, especially after the restructuring of its global business. Kaushik set a target price of Rs 133 by the end of the year, believing that all negative factors are already priced in.
Conclusion:
Zomato’s shares witnessed a decline following a five-day climb, prompting speculation on its next moves. Analysts have identified potential support levels around Rs 70-75 and resistance in the Rs 85-90 range. While the stock’s recent earnings and global business restructuring have instilled investor confidence, the opinions regarding its future trajectory vary. Traders and potential buyers should consider these factors and market dynamics before making any investment decisions.
