Shares of Zomato became cheaper than a kilo of tomatoes
Recently, on May 11, when Zomato touched its lowest level of Rs 50.05, it became a reason for discussion on social media. The stock of the company started making fun of it. People started saying that tomatoes are more expensive than Zomato’s stock, Zomato’s stock has become cheaper than a kilo of tomatoes. At that time, tomato was at a level of around Rs 60 in the retail market. However, after that the company’s shares started rising.
Zomato jumps 60% in just 20 days
After touching its all-time low, Zomato shares started seeing a rise once again. In the last 20 days, the stock of Zomato has jumped almost 60 percent. However, Zomato is still down 53 per cent from its all-time high of Rs 169.10. The stock of Zomato has climbed up from the level of 50.05 to the level of Rs 74.70. That is, in 20 days, this stock has seen a rise of Rs 24.65. When Zomato’s shares were falling sharply, investors got worried and were thinking of exiting it. Now that Zomato is going up fast, they are again confused whether to exit or stay with it. Other investors are wondering whether to invest or not.
A look at the condition of the company
Zomato has incurred a loss of Rs 359.70 crore for the quarter ended March 2022, as against Rs 134.20 crore in the same quarter last year. The company’s loss in FY 2022 stood at Rs 1222.50 crore, as against Rs 816.40 crore in the previous year. That is, it was in deficit before and is still in loss, on the contrary, the deficit has increased. The company’s income was Rs 692.40 crore last year, which has increased by about 75.01 percent to Rs 1211.80 crore this year. That is, there has been a strong increase in the earnings of the company, but instead of increasing the profit, it has decreased.
Invest now or not?
- Zomato’s fourth quarter results may have been very poor, but they are reported to be better than expected. At the same time, in view of the strong growth in the earnings of the company, many brokerage firms are advising to buy it.
- Global brokerage CLSA has also given a buy call and has a target price of Rs 90.
- Morgan Stanley has also advised to buy it and has set a target of Rs 135. The company believes that Zomato is moving in the right direction.
- JM Financial has also given a buy recommendation. However, the company has reduced the target price to Rs 115, which was earlier being said to be Rs 140.
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