Mixed Week For New-Age Tech Stocks; PB Fintech Top Gainer

The Indian new-age tech stocks witnessed a mixed performance this week as multiple factors, including a revival in the broader equity market, strong Q4 FY24 performance of a few startups and stock-specific developments, led to variations in trading.

Ten out of the 20 new-age tech stocks under Inc42’s coverage this week gained in a range of 0.9% to over 13%. PB Fintech emerged as the top gainer with shares up 13.3% this week.

Among the other gainers were MapmyIndia, RateGain, EaseMyTrip and ideaForge. We must note that this week drone startup ideaForge posted a 30% decline in its consolidated profit after tax (PAT) to INR 10.3 Cr in the March quarter.

On the other hand, 10 others, including Paytm, Fino Payments Bank, Zomato, Mamaearth, Delhivery and TAC Infosec saw a southbound movement this week in a range of 1.5% to 5.2%.

Mamaearth turned out to be the biggest loser with shares falling 5.2% on the BSE.

Both Zomato and Delhivery also reported their respective Q4 performances this week.

Meanwhile, there is a new entrant among the new-age tech stocks. B2B travel portal Travel Boutique Online or TBO Tek made a strong public market debut this week. Its shares were listed at a 55% premium, at INR 1,426, on the NSE and a 50% premium, at INR 1,380, on the BSE.

At least two more new-age tech startups are expected to get listed this month. 

Insurtech unicorn Go Digit General Insurance’s (Digit) is set to get listed on May 23. Its public issue was subscribed 9.6X on the final day of its bidding on May 17. 

On the other hand, coworking startup Awfis’ public issue will open for bidding on May 22. It has set a price band of INR 364-INR 383 for its upcoming INR 599 Cr IPO.

This week, the Indian stock market had a special trading session on Saturday (May 18). 

In the broader market, benchmark indices Sensex and Nifty50 increased 1.85% and 2.03%, respectively. While Sensex ended the week at 74,005.94, Nifty50 ended at 22,502. 

Commenting on the market performance, Vinod Nair, head of research at Geojit Financial Services, said that the domestic market sustained its recovery momentum from the recent lows, primarily helped by positive signals from its global counterparts and better-than-anticipated earnings from index heavyweights. 

“The broader market remained positive, driven by persistent buying in heavyweight sectoral stocks. Furthermore, a moderation in India’s CPI and lower-than-expected inflation figures from the US Fed have stimulated investor confidence,” he said. 

Despite favourable global cues, there are still uncertainties around upcoming general election results. Amid this, analysts expect volatility to continue in the market.

Now, let’s take a look at the performance of some of the new-age tech stocks this week.

The 21 new-age tech stocks ended this week with a total market capitalisation of $51.35 Bn as against 20 of them ending the previous week at $49.02 Bn.

Zomato Slumps Despite A Strong Q4

Shares of foodtech major Zomato fell 3.4% on the BSE this week, ending the last trading session at INR 194.35.

In The News For:

• Zomato’s consolidated PAT jumped 26.8% quarter-on-quarter (QoQ) to INR 175 Cr in Q4 while operating revenue increased over 8% to INR 3,562 Cr. Its quick commerce business Blinkit turned adjusted EBITDA positive in the month of March 2024. 
• Blinkit is emerging as a stronger business of Zomato over its core food delivery vertical. The quick commerce arm’s operating revenue zoomed 112% YoY and 19% QoQ to INR 769 Cr in Q4.
• Meanwhile, Zomato is aiming to expand and scale its home-cooked meal service ‘Zomato Everyday’ in Bengaluru and Mumbai.
• The company disclosed that it has voluntarily surrendered the certificate of authorisation it obtained from the Reserve Bank of India (RBI) to operate as an online payment aggregator.
• Zomato is also expanding its priority delivery offering to more cities like Delhi, Hyderabad and Pune. 
• The company has also sought approval from its shareholders for the formulation, adoption and implementation of a new employee stock option plan, Zomato ESOP 2024, to grant 18.26 Cr employee stock options.

Following the Q4 FY24 earnings announcement, a few brokerages increased their price targets (PTs) on Zomato. Bernstein increased the PT to INR 230 from INR 200 on the back of the strong Blinkit growth expectations.

The brokerage expects Blinkit to grow more than 40% YoY.

Nuvama hiked its PT on Zomato to INR 245 from INR 180 earlier. “We anticipate the aggressive addition of dark stores to hurt margin expansion for Blinkit in the next two quarters, but this effect is expected to be more than offset by higher margins in FY26,” the brokerage noted.

Elara Capital also hiked its PT on the stock to INR 280 from INR 250 earlier.

However, Kotak Institutional Equities cut its fair value on Zomato to INR 225 from INR 230 earlier.

“We like the company for sharp execution across verticals,” said the brokerage. “Weak demand for Zomato’s services and higher competitive intensity are key risks to our call.”

Delhivery Slips Into Loss In Q4

Ahead of its Q4 earnings announcement on Friday (May 17), shares of Delhivery ended the day’s trading session 0.8% higher at INR 453.85 on the BSE. 

However, the shares slumped almost 4% during Saturday’s trading session, ending the week at INR 435.9.

In The News For:

• After reporting its maiden profitable quarter in Q3 FY24, Delhivery slipped into losses in Q4 with a consolidated net loss of INR 69 Cr. 
• Its top line was hurt by a decline in its express parcel and cross-border services during the quarter, which the company attributed to a fall in shipment volume due to a softness in ecommerce demand and to the Chinese New Year, respectively.
• The logistics unicorn announced its setting up a wholly-owned subsidiary, Delhivery Robotics India, to manufacture drones and provide freight air transportation services.
• Its executive director and chief business officer Sandeep Kumar Barasia resigned.
• Delhivery also announced the allotment of 75,000 stock options under its Employee Stock Option Plan (ESOP) 2012.

Overall, the shares of Delhivery fell almost 3.8% this week hurt by its Q4 performance update.

PB Fintech Emerges As The Biggest Gainer

Reversing last week’s sharp decline, shares of PB Fintech rallied 13.3% this week, closing at INR 1,359.7 on the BSE on Saturday.

We must note that last week the parent entity of insurtech major Policybazaar posted a 62% QoQ jump in its consolidated net profit to INR 60.2 Cr in the March quarter. Post the sharp rally this week, the market cap of PB Fintech also crossed the $7 Bn mark.

On the back of its rising market value, PB Fintech also got added to the MSCI India Index in the May review.

Top executives of the fintech major – Yashish Dahiya and Alok Bansal – sold 83.7 Lakh shares in the company via block or bulk deals.

The offloaded shares were lapped up by several institutional investors, including multiple funds of HSBC, Axis Mutual Fund, and HDFC, BNP Paribas Arbitrage, and Goldman Sachs.

The shares of PB Fintech are currently trading at a level last seen in mid-November 2021, just post its listing.

Following the company’s strong Q4 show, ICICI Securities hiked its PT on PB Fintech to INR 1,311 from INR 818 earlier.

“The moat of the platform has been well established in FY24, having grown more than the industry in key segments (health/life) along with important client wins. Ability to gain market share, expansion of client base and growth in registered customers are structural advantages,” said the brokerage.

Overall, its shares have gained over 71% year to date.