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.

Also Read: Mamaearth shares jump 10% on strong Q3 earningsHSBC maintained a buy view on Zomato and hiked the target price to Rs 163 from an earlier target of Rs 150. The brokerage said that there were enough reasons to cheer the company’s Q3 results. The food delivery and quick commerce (QC) business performed better than HSBC’s expectations, this brokerage said as it sees normalisation in growth in this segment going forward.The QC business continues to perform both in terms of profitability and growth, HSBC said in its brokerage note.

Nuvama values Zomato using SOTP and maintains a ‘Buy’ with the revised target price of Rs 180 which was up from an earlier target of Rs 140 as we roll forward to Q4FY26. The Blinkit business outshines as the company’s overall profitability surprises, Nuvama note said.

Macquarie on the other hand, has maintained an ‘Underperform’ rating on the counter with a target price of Rs 76. The brokerage finds steady margin improvements and strong quick commerce growth. The food delivery MTU (monthly transacting users) additions were lacklustre at 2%, it said.

Macquarie maintains its guarded stance as shares are pricing in 25-35% 10Y revenue CAGR and a duopoly industry structure in perpetuity in the face of ONDC. Market has rewarded Zomato’s execution over the past year, it said. Stock is now trading at our fundamental blue-sky valuation.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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