The shares of Zomato Ltd. ended their seven-day profit-booking winning streak.
Shares of the online food delivery company have jumped 23% in the past seven days. The stock fell from Rs 54.50 at the close on August 5 to Rs 67.05 at the close on Thursday, according to BSE data. The stock fell 8.4% during the day and was trading down 6.7% at 12:30 p.m. Friday.
The current price correction is largely for profit after rallying from Rs 40 to Rs 65, Deven Choksey, Managing Director of KR Choksey told BQ Prime. “Every drop in this stock would be a buying opportunity.”
Although Blinkit Co., recently acquired by Zomato, may contribute to Zomato’s profits, this will not be reflected on the street because the street knows that Zomato is unable to make profits on its own, Choksey said.
“The market understands this topic very well,” he said. “For Zomato to become profitable on a stand-alone basis is a farcical cry.”
Zomato last week completed the acquisition of the grocery delivery platform, pushing the stock up 9%.
Shares of Zomato were down 5.7% at Rs. 63.25 each as of 11:33 a.m. Friday, while the benchmark S&P BSE Sensex lost 0.7%.
Of the 22 analysts who follow the company, 19 maintain “buy” and two suggest “hold”, while one recommends “sell”, according to Bloomberg data. The 12-month consensus price target implies a 32.6% upside.