Zomato stock rises 4% as board to consider acquisition deal on June 24

Shares of food delivery firm Zomato gained 4 per cent today in an otherwise weak market after the company said its board would meet on Friday, June 24, to consider a proposed acquisition.

Zomato stock rose 3.7 per cent intraday to Rs 68.60 against the previous close of Rs 66.15 on BSE. Zomato stock is trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The stock has fallen 51 per cent in 2022 and gained 16.28 per cent in a month.

The stock hit a 52-week high of Rs 169.10 on November 16, 2021 and a 52-week low of Rs 50.35 on May 11, 2022.

Total 17.99 lakh shares of the firm changed hands amounting to a turnover of Rs 12.08 crore on BSE. The market cap of the firm stood at Rs 53,186 crore on BSE.

Stocks in news: HDFC Bank, HUL, Hero MotoCorp, PVR and more

"The meeting of the board of directors of the company is scheduled on June 24 to consider a potential acquisition transaction by the company, the consideration for the same may be discharged through issuance of equity shares on preferential basis," Zomato said in an exchange filing on Tuesday after market hours.

The firm reported a loss of Rs 360 crore in the fourth quarter ended March 31, 2022 against net loss of Rs 134 crore in the year-ago period. Consolidated revenue from operations climbed 75 per cent to Rs 1,212 crore as against Rs 692 crore in the same quarter last fiscal.

After the earnings, Morgan Stanley turned overweight on the stock with a target price of Rs 135. It said Q4 numbers were in line, with improved transparency on segment disclosures.

The firm gave a better outlook for Q1 of this fiscal and plans a tighter framework around capital allocation. With these results, the company is moving in the right direction although it needs consistent execution, said the financial services firm.

Global brokerage UBS too gave a buy call on Zomato stock with a target price of Rs 130. The financial services firm said Q4 was a healthy one despite reopening headwinds. The firm's disclosures have also improved this quarter, which is a positive. It believes growth drivers will continue to remain strong for the company.