Zomato Share Price Slips Below 20-DMA Amid Market Volatility

Zomato Share Price Slips Amid Market Volatility

The Indian equity market has been experiencing increased volatility, with key benchmark indices losing their psychological support levels. The Nifty50 index has fallen below the 25,000 mark, while the Sensex has slipped below 81,500, both declining by 0.35%.

One stock significantly impacted by the market’s volatility is Zomato. On October 16, Zomato’s share price dropped by 1.81%. After opening the day at Rs 279, the stock continued to fall, reaching its day’s low by 12:20 PM. With this decline, Zomato’s share price has slipped below its 20-day moving average (20-DMA).

Zomato’s October Performance: Flat But Resilient

Zomato’s share price has remained nearly flat throughout October, registering only a 0.5% gain. However, this underwhelming performance could be attributed to the impressive rally witnessed since June, where the stock surged by 53%. Year-to-date (YTD), Zomato’s share price has doubled, delivering multibagger returns to its shareholders.

Strong Growth Across Key Segments

Despite the recent dip in its share price, Zomato’s underlying business continues to show robust growth. The company’s Gross Order Value (GOV) across its B2C businesses—food delivery, quick commerce, and going-out—grew 53% year-on-year (YoY) in Q1FY25 to Rs 15,455 crore. Here are the breakdowns:

• Food Delivery GOV: Grew by 27% YoY and 10% quarter-on-quarter (QoQ).
• Quick Commerce GOV: Showed a remarkable 130% YoY growth and a 22% QoQ increase.
• Going-out GOV: Increased by 106% YoY and 19% QoQ.

Zomato’s B2B arm, Hyperpure, also saw revenue growth of 96% YoY and 27% QoQ, with profitability improving across the board.

Profitability Milestone Achieved

On the profitability front, Zomato’s consolidated adjusted EBITDA rose by Rs 287 crore YoY to Rs 299 crore in Q1FY25. The company turned EBITDA positive a year ago, and within this short span, it is now generating an annualized profit of Rs 1,200 crore.

Despite the temporary dip in share price, Zomato’s solid financial performance and growth across its business verticals indicate a positive long-term outlook.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.