Multibagger Zomato jumps 10% in two sessions. What is behind the uptick?
Zomato shares extended their gains to 10% in two sessions and hit a fresh 52-week high of Rs 156.70 on the NSE on Monday on the back of strong December quarter earnings that were much higher than the Street's estimates. Strong investors' interest in the multibagger stock followed in yet another session with more than 5.61 crore shares changing hands on the NSE around 10:20 am.
The stock is currently trading above its 50-day and 200-day simple moving averages (SMA's) and the two-day rally has further dragged the stock into the overbought zone. Day's MFI according to Trendlyne stands around 81. Meanwhile, RSI is hovering near the 70 mark. A number above 70 is considered as overbought.
Zomato's third-quarter earnings beat the estimates on the back of robust growth in food delivery and hyperpure businesses. Net profit jumped nearly 4x (283%) quarter-on-quarter (QoQ) to Rs 138 crore. An ET Now poll saw the figure around Rs 36 crore. The company had posted a loss of Rs 347 crore in the last year period. Revenue from operations in the third quarter increased 69% year-on-year to Rs 3,288 crore.
The stock has delivered returns of 200% over the past 12 months.
Following the earnings, HSBC and Nuvama recommended buy views and raised their price targets of the counter while Macquarie appeared unimpressed as it reiterated its ‘Underperform’ rating.
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HSBC maintained a buy view on Zomato and hiked the target price to Rs 163 from an earlier target of Rs 150. The
