Shares of Zomato gained as much as 7.8% to touch a high of INR 73.2 during the intraday trading on the BSE
Zomato’s upbeat Q4 results and its profitability target seems to have restored the confidence in its investors
In line with the rise in the broader market due positive global cues, shares of Nykaa and Paytm also jumped on Friday
Zomato seems to have left bad days behind, as the stock, which was one of the worst hits among the new-age tech companies in 2022, is on an upward trajectory now.
In a sharp jump on Friday (May 2), shares of Zomato gained as much as 7.8% to touch a high of INR 73.2 during the intraday trading on the BSE. Later, the stock gave up some of the gains and closed the session at nearly a seven-month high of INR 71.19, up around 5% from Thursday’s close.
In fact, Zomato shares have rallied over 10% in the last two weeks since the startup announced becoming adjusted EBITDA positive in the March quarter of FY23, excluding its quick-commerce vertical. In Q4, Zomato also narrowed net loss by over 45% both on a year-on-year (YoY) and sequential basis.
After a fall of over 60% in its stock price in 2022, there were a lot of concerns about Zomato. However, the company’s announcement that it is eyeing to make its consolidated business profitable on an adjusted EBITDA basis within the next four quarters seems to have restored investor confidence. It is also targeting posting a profit after tax within this timeline.
Following its earnings beat in Q4, Jefferies Group added Zomato to the India long-only portfolio and has a 4% weightage on the stock. It came while the multinational investment bank reduced the investments in China’s JD.com and Alibaba.
The rise in shares of Zomato today also came after the foodtech giant held a meeting with its investors and HNIs in Mumbai on June 1.
It is also pertinent to note that the government-backed Open Network for Digital Commerce (ONDC), which had started being considered as a potential competitor to Zomato and Swiggy, introduced a new incentive regime limiting the discounts to INR 100 per order on its platform.
The broader stock market also saw a rise on Friday on positive global cues as the US Senate passed a bill approving a raise in its debt ceiling. While Sensex rose about 0.2% to 62,547.11, Nifty50 zoomed over 0.2% to 18,534.10.
In line with the increase in the broader market, other new-age tech stocks also jumped.
Nykaa jumped 7.5% today, ending Friday’s session at INR 135.6 on the BSE after a volatile week. Its shares traded at a significantly high volume of about 25 Lakh on the BSE today. At the current level, Nykaa shares are up over 8% since it announced its Q4 FY23 results.
Paytm also gained 2.2% to end Friday’s session at INR 717.55 on the BSE. Its shares are up over 4% since the company reported upbeat Q4 results.
