Despite widening losses in Q2FY22, what’s driving Zomato shares that are up 12% in 2 sessions
The company reported a higher net loss of Rs 434.9 crore during the Q2FY22 as compared to a loss of Rs 360.7 crore in the previous quarter.
Despite widening losses in the second quarter of the financial year 2021-22 (Q2FY22), the shares of food aggregator Zomato jumped to a record high of Rs 152.95 per share, post surging by around 9 per cent intraday on Friday. The stocks in the last two sessions have surged over 12 per cent.
The counter has been trading higher on multiple traits, including a $1-billion investment in the next two years, and also picked up stakes in Shiprocket, MagicPin, and CureFit during the quarter.
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The company reported a higher net loss of Rs 434.9 crore during the Q2FY22 as compared to a loss of Rs 360.7 crore reported in the previous quarter. On the contrary, revenues jumped by 21.2 per cent to Rs 1,024.2 crore in Q2FY22, as against the Rs 844.4 crore in the previous quarter.
The higher losses jumped on the back of investments in the growth of its food delivery business, especially in areas like branding, marketing, geographical expansion. Moreover, this is also due to increased delivery costs arising from “unpredictable weather and increase in fuel prices”.
The food aggregator in a statement also said that its increased marketing and promotions have resulted in a higher average monthly transaction user (MTU) at 15.3 million during the quarter versus 12.3 million MTUs in the previous quarter.
Similarly, Zomato, along with other 8 stocks, have been added to MSCI Inc, a leading provider of research-based indexes and analytics. The index has added SRF, Tata Power, Mindtree, Godrej Properties, IRCTC, Mphasis, Bharat Electronics, Bajaj Holdings, and removed IPCA Labs and REC.
Zomato has surged over 101 per cent from its issue price of Rs 74 per share at the upper end, the stock was first a startup company to list on the exchanges on August 23, 2021, with a premium of over 60 per cent on both NSE and BSE.
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