Zomato Ltd. shares have dropped more than 10% since Bank of America (BofA) downgraded the stock to ‘Neutral,’ raising concerns over valuation and profitability. The stock, which recently traded around ₹226.93, has now slipped to ₹203.29, erasing recent gains and threatening to break below the crucial ₹200 psychological mark.
What Triggered the Zomato Fall?
- BofA Downgrade: BofA cited near-term margin headwinds in Zomato’s food delivery segment and a plateau in growth, prompting a shift from ‘Buy’ to ‘Neutral’.
- Revised Target: The brokerage also slashed its target price to ₹250, signaling a muted outlook and limited upside potential from previous expectations.
- Weak Sentiment in New-Age Stocks: With growing investor scrutiny on tech valuations and delivery unit profitability, the downgrade amplified bearish sentiment.
Technical Breakdown: Zomato Cracks Below Key Levels
Zomato’s daily chart paints a bearish picture, confirming a technical correction of 10.4% from the recent swing high.
Support Levels:
- ₹203.29: Immediate support, currently under retest.
- ₹200.34: A critical zone — breakdown here could trigger steeper falls toward ₹190 or even ₹180.
Resistance Zones:
- ₹211.00: Nearest resistance that must be cleared to reverse momentum.
- ₹226.93: Recent top where selling pressure intensified.
Conclusion
Zomato’s sharp 10% drop following BofA’s downgrade has brought the stock to a critical technical juncture. With ₹200 acting as a make-or-break level, the coming sessions will be crucial in determining whether buyers step in or the downtrend deepens. For now, caution remains key — especially with broader market sentiment turning selective around high-growth tech names.
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