Eleven out of the 14 new-age tech stocks under Inc42’s coverage gained in a range of 0.4% to over 10% this week, with Delhivery emerging the biggest winner
Shares of Zomato ended the rising streak of last four week this week by slumping a little over 4%, becoming the second-biggest loser after CarTrade Technologies
The broader market also saw a rally, with Sensex gaining 1.21% to 63,384.58 and Nifty50 rising 1.41% to end the week at 18,826
After a lull of over a year, the worst seems to be over for new-age tech stocks as they continue to rally on the back of positive sentiment in the broader equity market and stock-specific actions.
Eleven out of the 14 new-age tech stocks under Inc42’s coverage gained in a range of 0.4% to over 10% this week. Delhivery emerged as the biggest winner this week by gaining 10.1% on the BSE, followed closely by Paytm with a gain of 9.9%. Nazara Technologies also rose 9.3%, while Tracxn Technologies and Nykaa gained 8.7% and 4.1%, respectively.
However, after ending the past four weeks in the green, Zomato shares slumped a little over 4% this week. The food tech giant emerged the second-biggest loser this week after CarTrade Technologies, which fell over 7% on the BSE.
RateGain Technologies (down about 2%) is the third loser of the week among the new-age tech stocks.
In the broader market, benchmark indices Sensex gained 1.21% to 63,384.58 while Nifty50 rose 1.41% to end the week at 18,826. In fact, all the sectoral indices gained this week, except Nifty Bank. Mid- and small-cap companies are also witnessing a sustained momentum for the last few weeks.
Commenting on the performance of the market, Vinod Nair, head of research at Geojit Financial Services, said, “Both domestic and global markets have gone through a data-loaded week. The sustained flow of better-than-expected macroeconomic data helped maintain positive sentiments across domestic equities.”
“Notably, the healthy CPI (consumer price index), WPI (wholesale price index), and IIP (Index of Industrial Production) data contributed to investor optimism. The domestic CPI data moderated, moving closer to the target set by the RBI, primarily due to a tone-down in food inflation and a favourable base, which increased the likelihood of a rate cut before the year ends,” he added.
As per data released by the Indian government, the country’s WPI inflation rate fell to an over seven year low of 3.48% in May while retail inflation eased to a more than two-year low of 4.25%.
Meanwhile, Siddhartha Khemka, head of retail research at Motilal Oswal, said that the market will closely watch Prime Minister Narendra Modi’s visit to the US next week. A number of agreements are likely to be signed during the PM’s state visit, with defence expected to be the main area of focus.
Now, let’s dig deeper into analysing the performance of some of the new-age tech stocks this week.
The 14 new-age tech stocks under Inc42’s coverage ended the week with a total market capitalisation of $32.44 Bn as against $31 Bn last week and $28.96 Bn the week before that.
Zomato Ends The Week In Red
Shares of Zomato, which have been rallying since the end of last month, ended the winning streak this week by falling about 4.2% to INR 74.34 on the BSE.
Improved investor sentiment due to the foodtech major reporting adjusted EBITDA profitability, ex-Blinkit business, led to the recent rally in the stock.
This week, Zomato also announced the deregistration of its step-down subsidiary Zomato Australia Pty Limited, located in Australia.
However, analysts remain bullish on Zomato despite the fall this week.
The selling was inevitable after this sharp rally, said Rupak De, senior technical analyst at LKP Securities. He cited profit booking by investors who bought the shares at INR 50-INR 55 levels as the reason behind the fall this week.
“Zomato’s support is at INR 72, if that is broken, a further correction towards INR 65 is possible. On the higher side, the stock has its resistance at INR 76, which, if broken, Zomato will resume its uptrend once again,” said De.
Meanwhile, Zomato could face selling pressure in the short term if reports suggesting SoftBank’s probable stake sale in the company turn out to be true.
Santosh Meena, head of research at Swastika Investmart, said that on the upside, Zomato may test the level of INR 88, indicating further potential gains for the stock.
SoftBank To Further Offload Stake In Paytm?
As per the report that emerged this week, besides Zomato, SoftBank is also likely to sell its stake in Paytm. While SoftBank has sold its stake in the fintech company earlier as well, this would be the first time that the Japanese VC major would book profits.
SoftBank would reportedly sell its stakes in small tranches and not via block deals.
SoftBank had paid around INR 830-INR 840 per share for Paytm and now its shares are trading at INR 895.5 on the BSE.
Like Zomato, shares of Paytm have also risen sharply over the last few weeks. Since the beginning of this month, Paytm has gained over 27%. This week also Paytm gained almost 10% on the BSE.
“Looking at Paytm’s current trajectory, it appears that the immediate target for its shares is around INR 990. However, at this level, we may expect some profit booking as investors take the opportunity to realise their gains,” said Swastika Investmart’s Meena.
On the downside, he sees a strong demand for Paytm between INR 840 and INR 820, which may act as a support for the stock.
On the other hand, LKP Securities’ De believes that INR 900 is the resistance for Paytm. Once the stock clears this level, it can move up towards INR 1,100 in the short- to medium-term, he said.
Paytm listed on the BSE at INR 1,955 a piece and is currently trading 54% lower than the listing price.
Delhivery Closes At A 7-Month High
Despite the improvement in the overall sentiment for the new-age tech stocks, logistics unicorn Delhivery was witnessing a downtrend since the beginning of the month. The fall was also sectoral as its logistics peers were also facing selling pressure.
However, Delhivery reversed this declining trend and emerged as the biggest winner this week, gaining over 10% to close the week at INR 385.4 on the BSE. The shares had closed at such a level at the beginning of November last year.
It must be noted that Delhivery held an investors’ conference this week. Besides, the startup also informed its stakeholders last Friday about allotting 19.41 Lakh equity shares to its employees as part of its ESOP policies.
Following the new allotments, the paid-up share capital of Delhivery increased to INR 73.12 Cr from INR 72.92 Cr.
Delhivery has a crucial resistance at INR 400. The stock looks positive but it needs to clear the resistance level to rally towards INR 550-INR 600 in the short-term, said LKP Securities’ De.
The support for the stock is at INR 380, he said.
In line with the rising trend of most new-age tech stocks this year, Delhivery shares are also trading 16.24% higher year to date. However, the stock is still trading about 22% lower from its listing price of INR 493 on the BSE.
