Zomato has slashed 600 customer service jobs within a year of hiring as the company struggles with challenges in food delivery and mounting losses.
Yet Zomato share price is heating up today (Wednesday, April 2), reports ET Now Digital, opening green at Rs 203.50 on NSE versus Tuesday's close of Rs 202.01.
The stock continued its upward momentum to hit an intraday high of Rs 210.70, jumping 4.15%. By 2.30 pm, shares held firmly near the day's peak at Rs 210.58, with heavy trading volume of 4.21 crore shares changing hands. This marks the second straight session of gains, with the stock now trading above its five-day moving average but still below longer-term averages.
The layoffs targeted employees hired through last year's Zomato Associate Accelerator Programme (ZAAP), which brought in 1,500 customer support staff. Many were reportedly let go without warning.
Despite the workforce cuts, market sentiment remains positive. A market expert told ET NOW Swadesh that Zomato is "a very strong franchise" worth buying for the long term, especially on dips, with earnings improvements expected within "one or two quarters."
"Recovery in Zomato shares will be very strong in the coming quarters," the expert predicted, recommending current shareholders hold their positions while adding more during price corrections.
Adding to investor optimism, ICICI Securities recently initiated coverage with a BUY rating and a hefty Rs 310 price target.
Recently renamed Eternal, Zomato has joined both the Nifty index and BSE Sensex (December 2024), now commanding a Rs 2.03 lakh crore market cap as of April 2, per BSE data.
