Shares of Zomato Ltd. snapped their seven-day winning streak on profit-booking.
Shares of the online food delivery company had surged 23% over the past seven days. The stock rose from Rs 54.50 at close on Aug. 5 to Rs 67.05 at close on Thursday, according to BSE data. The stock fell as much as 8.4% intraday and was trading 6.7% down as of 12:30 p.m. on Friday.
The current correction in the price is largely profit-booking after rallying from Rs 40 to Rs 65, Deven Choksey, managing director of KR Choksey told BQ Prime. “Every fall of this stock would be a buying opportunity.”
While Blinkit Co., recently acquired by Zomato, could contribute to Zomato’s profit, it will not reflect on the street as the street knows Zomato is incapable of making a profit on its own, Choksey said.
“The market understands this subject very well,” he said. “For Zomato to become profitable on a standalone basis is a far-fetched cry.”
Zomato, last week, completed the acquisition of the grocery delivery platform, driving the stock up 9%.
Shares of Zomato declined 5.7% to Rs. 63.25 apiece at 11:33 a.m. on Friday, while the benchmark S&P BSE Sensex lost 0.7%.
Of the 22 analysts tracking the company, 19 maintain ‘buy’ and two suggest ‘hold’, while one recommends ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 32.6%.