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Business News/ Markets / Stock Markets/  Zomato shares see biggest one-day gain in 2 months after as Q2 losses narrow

Zomato shares see biggest one-day gain in 2 months after as Q2 losses narrow

Zomato reported narrowing of its consolidated net loss to ₹250.8 crore in Q2

Zomato shares today zoomed 13% in intra-day tradePremium
Zomato shares today zoomed 13% in intra-day trade

Shares of Zomato Ltd today surged the most in two months after the food delivery firm reported a narrower loss for the second quarter. Zomato shared surged 13% to 72.25 at it intraday high. Zomato post market hours on Thursday reported narrowing of its consolidated net loss to 250.8 crore for the second quarter ended September 2022, as compared to 434.9 crore loss in the year-ago period. 

Adjusted core loss, excluding figures for its recently acquired quick-commerce business Blinkit, losses narrowed to 60 crore from 310 crore. The transaction with Blinkit closed on August 10, 2022 and hence the financials for Blinkit have been consolidated from that date.

“Zomato stock has given a beautiful breakout of the inverse head & shoulder formation pattern with huge volume. The overall structure of the stock appears to be good as it attempts to bottom out from lower levels, with a cluster of moving averages forming a base around Rs. 60. Stock has the potential to rise to 90+ levels in a longer time frame. The momentum indicator RSI is trading above the 50 mark with a positive bias, whereas MACD is witnessing a centerline crossover. On the upside, 75 will be an immediate hurdle, but 90 looks like an imminent target in the near term. On the downside, 60 is a strong support level," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart.

Revenue from operations increased to 1,661.3 crore during the July-September quarter, as against 1,024.2 crore in the corresponding period of the previous financial year, it said in a regulatory filing.

"We are building for the long term, and we are going to continue evaluating and taking bets which may compromise short term expectations for the long term," Zomato founder Deepinder Goyal said.

In the broader internet stock space, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said there is high activity in some of these stocks where the lock-in period of initial investors is ending. 

“There is huge supply and high volatility in their stock prices. It is difficult to say what is the fair value for such stocks since many are loss-making and, therefore, the conventional parameters of valuations like EPS and PE ratio do not apply. Some of these stocks have a long runway of potential high growth over many years. Some of them may turn out to be big wealth creators in the long run. So this segment may be keenly watched," he added. 

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Published: 11 Nov 2022, 10:35 AM IST
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