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In our last write-up, we discussed Amaraja Battery & which belongs to the Auto Ancillaries sector. Now we have found one multibagger company that belongs to the E-commerce sector. As everyone is preferring online food orders and based on that the demand will likely increase.
Market Sentiment Analysis:
We all are eyewitnesses of this new lifetime high. almost hit the 20000 in July 2023 and showed profit booking. While coming down Nifty has made a Falling Wedge chart pattern on the daily chart. This pattern is a bullish indication and this week nifty has given a breakout to the trendline and resumed up trend. For the coming week, 19500 will act as support. We are bullish on the market and we can see a new lifetime high. Let’s discuss the company fundamentals and chart.
Company Business Module:
Zomato Limited (NS:) is one of the leading online food service platforms in terms of the value of food sold and that everyone knows. Its offerings include food delivery, dining-out services, loyalty programs, and others. Since March 2020, after the first lockdown, everyone has preferred online food delivery, and based on that, the demand for online food delivery has been increasing.
Technical Analysis:
Zomato’s IPO launched in July 2021 and the IPO price was 72-76. Many people applied for this company and earned good profit on the first day of an open market. The share price launched at 115 and went to 170 in a few weeks. After that bear took the handover and the share price came near 50 in a year. Then share price has started to trade in a zone that is 45-70. In this drive of zone retail investors got panic and sold their ownership. At the same time big investors have taken handover, they had accumulated all ownership from retailers.
Finally, in April 2023 share price was given a breakout on the weekly chart with volumes. That was the trend change confirmation of Zomato and the share price went to the 100. What next? The share price is trading around 100 and we are expecting 120/130 levels in the coming few months. Immediate support is around 90/75.
Fundamental Analysis:
- The services are demanding and demand is increasing.
- The company is almost debt-free.
- ROE & ROCE are negative.
- The company is expanding its business rapidly.
- Sales growth of the company is on the top.
Why did the share price go up?
Demand for online food & grocery delivery is increasing and based on that the sales are increasing. Also, in the last quarter, for the first time company made a 2 crore profit. Now the company is growing and we also have to sit in this bull rally.
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