Zomato’s share price increased 13% and reached Rs 50 as its Q1 net loss was cut in half; should you buy, sell, or hold?

Zomato’s share price soared more than 13 per cent to Rs 52.60 apiece on BSE on Tuesday, after the company’s net loss halved in Apr-Jun quarter of the fiscal.

After the company’s net loss was cut in half during the Apr-Jun quarter of the fiscal year, Zomato’s share price rose more than 13% to Rs 52.60 a share on the BSE on Tuesday. The food technology company reported a combined loss of Rs 186 crore for the three months ended June 30, 2022, down from Rs 361 crore in Q1FY22. The quarter’s revenue increased 68% year over year to Rs 1,414 crore. According to technical analysts, the recent sell-off had put Zomato shares in a zone where they were severely oversold; now, the current pullback is causing a technical downturn. The stock may drop to about 55-57 levels during this correction, where resistance is anticipated to reappear. CMT, MSTA, Consulting Technical Analyst, and Founder Milan Vaishnav

Investors should hold Zomato shares for the time being, Vaishnav said. However, he continued, “any pullbacks on the higher side may be taken as a chance to exit.” Zomato’s stock price has increased by more than 28% during the past five days. However, it has decreased by 62% so far this year and 46% over the past six months. The stock was recommended for purchase by Jefferies last month, with a target price of $100 per share. It had stated that despite a significant decline in share price, Zomato stock was still trading at a premium to its regional and worldwide competitors.

Much improved Q1FY23 earnings where Zomato management are clearly showing their intent in turning Zomato into a profitable venture has led to a strong rally today, AR Ramachandran, Co-founder & Trainer, Tips2Trades told FinancialExpress.com. Ramachandran advised investors to buy on dip near Rs 48-48.5 for higher targets of Rs 61-65.7 in the coming days.

Zomato’s adjusted Ebitda loss for the April-June quarter of the fiscal was down to Rs 150 crore from Rs 170 crore in the year-ago period. “Now that the Zomato-Blinkit deal is approved, we have three companies — Zomato, Blinkit and Hyperpure — in the order of business size/impact. In addition to these three, we also have Feeding India. We are now at a stage of life where we are maturing from running (more or less) a single business to running multiple large companies,” Deepinder Goyal, founder and CEO of Zomato, wrote on the company’s Slack channel last week.