An analysis of the latest shareholding pattern of the new-age companies shows that domestic fund houses increased their ownership in Nykaa by 336 bps to 8.5% in Q1. The stock of the fashion and lifestyle e-tailer has been among the worst performers in the pack of new-age stocks and is down by about 39% in the last one year.
In the case of Zomato, MF stake went up by 190 bps to 8.3%. Fund managers have been hiking stake in the food tech company for every quarter since June 2022. The stock too has given fabulous returns of about 74% in the last one year.
MF holdings changed marginally in case of Paytm and PB Fintech. Out of the five big new-age stocks, Paytm is the only in which MFs sold their stake but FIIs bought. While FII ownership went up 28 bps in June quarter, MF holding reduced by 19 bps.
FII holdings reduced by 206 bps in Delhivery, 222 bps in Nykaa, 81 bps in PB Fintech and 18 bps in Zomato.
What should investors do?
After Paytm reported 39% YoY revenue growth in the June quarter, Goldman Sachs said the company is now the fastest-growing company within its India internet coverage, and remains firmly on track to also be the most profitable local internet company in its coverage starting FY25.
JPMorgan sees its revenues growing at 37% CAGR over FY22-26, to about $2.1bn, and contribution margins rising to 57% by FY26. “We expect Paytm to see strong revenue growth across all its business segments thanks to device monetization in payments, financial services cross-selling, ticketing recovery and rising ad monetization,” it said.
While Nykaa, which is yet to release its Q1 numbers, managed to grow its fashion revenues by 11% YoY, Zomato’s GOV growth may outpace most QSRs on a like to like basis.
“We think both these data points indicate possible market share gains for online v/s offline. This is in contrast to the trend that was playing out over the last 2-3 quarters,” ICICI Securities said, adding that B2B e-commerce is likely to continue on a strong growth trajectory in Q1 led by penetration increase as small businesses explore means of increasing their digital footprint on both supply and demand sides.
The domestic brokerage firm has buy ratings on Zomato, Nykaa and Delhivery.
Kotak Institutional Equities expects Zomato to report 10% sequential revenue growth on account of higher food delivery orders, as well as contribution from the Blinkit business. Overall EBITDA loss of Zomato may narrow sequentially on account of lower losses for Blinkit.
For Nykaa, it expects revenue growth of 31% YoY, driven by BPC revenue growth of 27% YoY and fashion business revenue growth of 31% YoY.
(With data inputs from Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)