Experts and brokerage houses are seeing the decline in Zomato as a great investment opportunity. The stock is looking better on the chart and there can be good growth in short term to mid term.
Shares of food delivery company Zomato have fallen more than 40 percent this year. At the same time, this record has broken from the high and has come to half the price. After making a bang in the market, there has been a big fall in the shares. The stock closed at Rs 126 on the day of listing, while it is currently trading around Rs 81. Zomato has definitely reduced its losses in the December quarter, but right now the market sentiment is disturbed. However, experts and brokerage houses are seeing this fall as a great investment opportunity. He says that the stock is looking better on the chart. Looking good in the short term to the mid term.
Shares fell 110 percent from record high
The stock of Zomato has broken 110 percent from its record high. The stock touched a level of Rs 169 on 16 November 2021, which is an all-time high. Now the share has come at a price of Rs 80. This year i.e. since January 1, the stock has fallen 42 per cent. At the same time, it has weakened by 17 percent in 1 month. It is clear that after the bumper listing on July 23, 2021, the stock was bullish for a few days, but later investors have sold fiercely. The issue price for the IPO was Rs 76, while the listing was done at Rs 115.
Rs 100 level important for the stock
IIFL VP-Research Anuj Gupta says that if we look at the technical chart, the stock has managed to stay near its support level. It is currently trading around Rs 75 to Rs 80. Investors should buy at the price of Rs 78 to 80. At the same time, the first target should be kept at Rs 95 with a stop loss of Rs 74. If the stock further breaks the level of Rs 100, then in the very short term it can strengthen from Rs 120 to Rs 125.
He says that the good thing is that the stock has not broken the support level. It is currently in oversold zone. In such a situation, recovery can be seen from here. The good thing is that the company has reduced its loss in the December quarter and it has remained around 68 crores.
valuation attractive
Brokerage house UBS has also advised to invest in Zomato’s stock. However, after the recent correction, the brokerage house has reduced the target from Rs 185 to Rs 130 by making a big cut. The brokerage says that the valuation of the stock is attractive and this is the right opportunity to enter from here.
Growth outlook strong
Zomato is a cash rich company and the business of the company is strong. There is not much competition in the sector in which the company operates. The company is continuously expanding its business. The business model of the company is good. The company does not own its assets, it is only a platform for business. There is a trend of ordering food online in India, so the business outlook is also strong.
(Disclaimer: Stock investment advice is given by the brokerage house. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing.)
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