Zomato shares in 'bear' grip with 20% fall from peak; stock nears 200-DMA

Zomato share: Including today's decline, Zomato shares have tumbled 14.2 per cent over the past four sessions. The stock has cracked 19.7 per cent from its 52-week high level of Rs 304.5 per share

Zomato share price: Zomato share price today stayed in a free fall on Wednesday, extending its decline into a fourth straight day. Zomato share today declined 3.2 per cent to an intraday low of Rs 244.25 per share.

 

Including today’s decline, Zomato shares have tumbled 14.2 per cent over the past four sessions. The stock has cracked 19.7 per cent from its 52-week high level of Rs 304.5 per share, hit on December 5, 2024.

 

By comparison, the BSE Sensex today is down 0.8 per cent as of 12:50 PM, and has fallen 3 per cent in four sessions.

 

 

Zomato share price target

Wednesday’s (January 8, 2025) decline in Zomato share price has pushed the stock below the lower end of the Bollinger Band, placed at 253, on the daily chart.

 

The stock was already trading below key moving averages such as 20-day moving average (20-DMA) of 278.5, 50-DMA of 272.5, and 100-DMA of 270.3.

 

Momentum indicators like MACD and Slow stochastic, too, are in a downtrend, indicating potential weakness ahead. If Zomato stock stays in bear grip, it may fall to 200-DMA of 236. Notably, the stock is nearing the 200-DMA for the first time since April 2023.

 

On the weekly chart, too, Zomato stock is nearing the lower end of the Bollinger band, placed at 239. Below this, the next support for the stock is at the 50-week moving average (50-WMA) level of 225.2.

 

That said, the stock is near ‘Oversold’ zone on the RSI indicator.

 

Zomato share news

On Tuesday, global brokerage Jefferies downgraded Zomato stock to ‘Hold’ slashing its share price target to Rs 275 from Rs 335 over fears of a dent in profitability due to intensifying competition.

 

Jefferies said industry players, including Swiggy’s Instamart, Zepto, and Amazon are pushing hard to expand their presence in the quick commerce space, which may challenge Zomato's Blinkit and its earnings.

 

While Jefferies acknowledged Zomato’s strong execution and growth potential, it highlighted that heightened competition could lead to aggressive discounting, threatening the medium-term profitability.

 

Meanwhile, in the wake of rising competition, Zomato has begun rolling out 15-minute food delivery service in select cities such as Mumbai and Bengaluru.

 

A dedicated "15-minute delivery" tab has appeared in Zomato app’s explore section, showcasing a range of quick-to-prepare and ready-to-eat dishes from participating restaurants. The new feature is a direct challenge to Swiggy's Bolt, Magicpin, and Zepto. READ MORE 

Zomato Q3 results expectations

According to analysts at Nuvama Institutional Equities, Zomato may deliver 14 per cent quarter-on-quarter (Q-o-Q) and 66 per cent year-on-year (Y-o-Y) growth in revenue in the December quarter (Q3FY25). It pegs revenue at Rs 5,463.5 crore for the quarter. 

 

Food delivery revenue, it said, is expected to grow 21 per cent  Y-o-Y while Blinkit revenue may surge 110 per cent Y-o-Y. 

 

Consolidated Ebitda margin, however, is expected to contract by 60bp Q-o-Q to 4.1 per cent, driven by higher competitive intensity in the quick commerce segment. Ebitda is projected at Rs 223.3 crore, up 337.9 per cent Y-o-Y but down 1.2 per cent Q-o-Q.

 

Zomato's Q3 adjusted profit may increase by 19.2 per cent Y-o-Y to Rs 164.4 crore. This would, however, be a dip of 6.6 per cent Q-o-Q.

 

Those at B&K Securities, meanwhile, peg Zomato's Q3FY25 adjusted profit at Rs 220 crore. It sees revenue at Rs 5,589.6 crore.