The markets were up, and one stock that really stood out should be appreciated. Zomato has delivered. Are you still waiting? Today’s discussion will focus on this stock, how it has turned around despite the difficult situations it faced at one point. We’ll cover that in the second half.
Market Overview
Let’s talk about where the markets are headed. The markets were flat by the end of the day, closing at exactly where they opened but still 0.35% higher than where they started. This move here is very close to a 3000-point rise from the recent June low, and it is getting a bit extended without rest. Every time the market extends so hard without rest in any one direction, there can be a case for a forced consolidation or rest.
The upcoming event is the budget on 23 July, less than eight days away. It will be crucial in terms of market movements. We might see a “sell on news” scenario or, if there’s a huge positive announcement, the markets may still not go up significantly. The best-case scenario seems to be that we don’t fall. Any unexpected news could change this dynamic.
Nifty Next 50
Today’s market movements saw Nifty with a 0.35% gain, Nifty Junior doing much better with a 0.86% increase, hitting a new high at 74,367
Nifty Mid and Small Cap
The mid caps closed 0.7% up at 21,448, another new high, while small caps were up 0.36%, within a small range.
Nifty Bank Overview
Bank Nifty was up 0.34%, taking support around 52,000 and consolidating there.
Nifty Heatmap
Public sector banks and enterprise stocks were the biggest movers today, with State Bank of India up 2.7%, SBI Life up 3.2%, and ONGC up 5%. Bajaj Auto, NTPC, and Ultra Semco also performed well. In the Nifty Next 50, Canara Bank, Punjab National Bank, Bank of Baroda, Gas Authority, and IOC did well. Zomato stood out with a significant performance, which we’ll discuss shortly.
Sectoral Overview
Sectorally, PSU banks were up 3.1%, real estate up 1.3%, public sector enterprises up 1.2%, and pharma up 1.1%. Energy and auto stocks also saw gains. There’s a relay race of sectors propping up the market, indicating that the market should not fall until a certain event has passed, emphasizing the importance of the upcoming budget.
Sectors of the Day
Nifty PSU Index
Stocks of the Day
Godfrey Phillips
Godfrey Phillips has been on a strong run, doubling its value in the last few months, likely due to some budget expectations. After consolidating for years, it has made a sharp move upward, showcasing the importance of patience in the market.
Story of the Day
Now, let’s talk about Zomato. Zomato has delivered and is one of my favorite stocks, not just for its services but for its resilience and strategic management. Despite being written off by many, Zomato has turned around under the leadership of Deepinder Goyal. They have experimented with new things, started and shut down unprofitable businesses, and today they are in a commanding position.
Zomato shares have jumped 4% to new all-time highs, hiking the platform fee to Rs 6 per order. This gradual fee increase, from Rs 2 to Rs 6, shows their strategic approach to revenue generation. The market cap has crossed the Rs 2 lakh crore mark, making Deepinder Goyal a billionaire.
Looking at the charts, Zomato initially fell after its listing, but by early 2023, it started to recover and chart a new story. The charts were able to predict this turnaround much ahead of the news, highlighting the importance of technical analysis. As the stock made new highs, it signaled a buying opportunity, which those who listened to the charts capitalized on.
The story is simple: they started with a low platform fee and gradually increased it. This strategy, seen in FMCG companies as well, shows how small incremental changes can have a significant impact on margins. Zomato’s continuous innovation and strong engagement with customers have paid off, making it a standout among new-age companies.
As a consumer, I am satisfied with their services, and as an investor, I appreciate their strategic management. This case study of Zomato highlights how the charts can tell you a story before it becomes public news, guiding your investment decisions.
