Shares of new age internet companies including Nykaa, PB Fintech, Zomato and Paytm were buzzing in Wednesday’s trade amid high volatility in the broader market.
Shares of FSN E-Commerce Ventures, the parent company of Nykaa, jumped more than 3 per cent to Rs 155.35. Zomato gained 3 per cent to Rs 56.15. PB Fintech, which operates PaisaBazaar and PolicyBazaar, added 2 per cent to Rs 476.15, while Paytm’s parent One 97 Communications traded at Rs 583.95, up 2 per cent.
Stocks such as CarTrade Tech, Easy Trip Planners, Nazara Technologies and Delhivery were also trading higher in Wednesday’s trade.
With the earnings season underway, brokerages have come out with quarterly projections for some of the new age companies, which suggested improved business momentum.
Festivities in the December quarter did bring some cheer to coverage companies, but the mood remains relatively sombre with an inflationary macroeconomic environment denting demand uptick, said JM Financial in its report.
New age internet companies were battered badly in the 12-15 months, plunging up to 75 per cent from record highs and cumulatively erasing more than Rs 2 lakh crore of notional wealth from investors’ kitty.
Paytm is likely to report a 46 per cent year-on-year (YoY) rise in revenues at Rs 2,125.70 crore compared with Rs 1,456.10 crore in the year-ago quarter, said ICICI Securities in a report. This brokearge expects Ebitda loss for Paytm declining to Rs 488.10 crore.
Global brokerage firm JP Morgan had maintained its ‘overweight’ rating on Paytm with a target price of Rs 1,100, whereas Morgan Stanley remains ‘equalweight’ on the stock with a target price of Rs 695.
JM Financial said the December quarter growth for Nykaa will be led by the festive demand, penetration in new channels and newer initiatives (eB2B superstore) and it believes that new initiatives like eB2B provides a significant opportunity for the company over next 3-5 years.
Both Paytm and Nykaa have been on the radar over corporate action. Paytm’s board approved a share buyback of Rs 850 crore at a fixed price of Rs 810 apiece. In November 2022, Nykaa’s shares traded ex-bonus in 5:1 ratio.
For Zomato, JM Financial expects only 1 per cent QoQ growth in food delivery GOV in the December quarter as it factors in adverse impact of inflationary pressures on discretionary spends and increase in dine-in consumption.
Blinkit’s GOV should at least see low-teens QoQ growth due to improvement in order throughput of dark stores, it said.
Domestic brokerage firm Kotak Institutional Equities has reduced its price target on the new-age stock to Rs 85 from Rs 100 earlier, but maintained its ‘buy’ rating on the stock.
PB Fintech is expected to deliver 44 per cent growth in insurance premium and 59 per cent YoY growth in loan disbursals, said JM Financial’s report. It also expects the revenue for Paisabazaar to grow at 71 per cent YoY and Policybazaar to grow at 59 per cent due to base effect and continued rise in insurance and credit penetration.
Nuvama Wealth, formerly known as Edelweiss Wealth, has initiated coverage on PB Fintech with a ‘Buy’ rating and a target price of Rs 550 as it sees online financial products as an exciting space.
CarTrade should deliver 9 per cent YoY revenue growth in 3QFY23 led by advertising revenues with an adjusted EBITDA margin of 23 per cent, with an improvement of 145bps QoQ, due to most expenses being fixed in nature and incremental revenue coming at higher margins, said JM Financial.
“We expect Nazara to report revenue growth of 76% YoY and 24% QoQ. We expect organic revenue growth of 44% YoY,” it said. “For Easy Trip we expect sequential growth of 18% QoQ in Gross booking revenues in 3QFY23 driven by the sharp demand rebound in the travel industry and favourable seasonality.”
Prabhudas Lilladher has ‘Buy’ rating on Nazara Technologies with a target price of Rs 1,012, while Jefferies has assigned a target price of Rs 700 on Delhivery.
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