SUMMARY
Eleven out of the 14 new-age tech stocks under Inc42’s coverage rose this week, with DroneAcharya emerging as the biggest winner
Shares of PB Fintech, which emerged as the biggest gainer last week, slumped 7% this week to become the biggest loser among the new-age tech startups
Sensex rose 1.43% to 59,832.97 this week while Nifty50 rose 1.38% to 17,599.15, helped by the RBI’s decision to not increase repo rate
Indian new-age tech stocks continued previous week’s momentum this week also, as the Reserve Bank of India’s (RBI’s) decision to take a pause in repo rate hike cheered the overall equity market.
Eleven out of the 14 new-age tech stocks under Inc42’s coverage rose this week, with DroneAcharya emerging as the biggest winner with gains of over 10%.
Tracxn Technologies, Nazara Technologies, Nykaa, Paytm, RateGain, and Zomato were the other gainers, rising in the range of 1% to 9%.
While Nykaa provided a somewhat disappointing business update for Q4 2023, Paytm reported another strong month of growth in loan disbursals. The fintech giant disbursed 4.1 Mn loans worth INR 4,468 Cr in March, a year-on-year (YoY) growth of 63% and 206%, respectively.
Meanwhile, shares of PB Fintech, which emerged as the biggest gainer last week, slumped 7% this week to become the biggest loser among the new-age tech startups.
There were only three trading sessions this week as the stock market was closed on April 4 and April 7 on the occasions of Mahavir Jayanti and Good Friday, respectively.
In the broader equity market, Sensex rose 1.43% to 59,832.97 this week while Nifty50 gained 1.38% to 17,599.15.
“After six consecutive hikes, the RBI kept the rate unchanged at 6.5%. The decision came as a surprise after the majority of central banks around the world continued to increase rates in an effort to tame stubbornly high inflation. Rate pause and encouraging domestic economic data continue to provide a positive undertone to the market,” said Siddhartha Khemka, head of retail research at Motilal Oswal.
However, he expects the market to remain range bound in the near term amid global uncertainties and fears of a US recession.
Now, let’s dig deeper to analyse 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 $26.66 Bn as against $26.31 Bn last week.
Nykaa’s Q4 Revenue Update
After a major slump last week, shares of beauty ecommerce startup Nykaa gained almost 11% in two straight sessions this week. However, the shares fell in the last trading session after the company reported its Q4 2023 revenue update on April 5.
On Thursday (April 6), the shares slipped 3.9%, ending the trading session at INR 131.2 on the BSE. Overall, Nykaa managed to gain 6.6% this week.
In The News For
- Nykaa said that consumer pullback in discretionary spending has had some impact on its fashion business, leading to subdued growth in net sales value (NSV) in Q4 FY23. In the previous quarter as well, CEO and MD Falguni Nayar said that revenue and margin were affected by weak consumer spending.
- The beauty and personal care (BPC) categories continued to witness strong demand in Q4, partially aided by the ‘Pink Love’ sale. BPC business saw higher YoY growth compared to the growth rates in the prior quarter, Nykaa said. The beauty ecommerce startup expects the percentage revenue growth rate in the fashion business to come through in the late teens during the quarter.
- Recently, five senior executives of Nykaa quit the company. The startup has not issued any official statement on the matter.
Competition Watch
- Mukesh Ambani-led Reliance launched its omnichannel beauty retail platform Tira this week.
Shares of Nykaa plummeted 55% in 2022 amid increasing competition in the beauty ecommerce space and macroeconomic headwinds. Even this year, the stock has corrected over 15% year to date (YTD).
Despite the challenges, Nomura, in a recent research note, reiterated its ‘buy’ rating on the stock with a price target of INR 214, which implies an upside of 63% to the stock’s last close.
While Nykaa’s NSV in the BPC vertical rose 26.5% YoY in Q3, Nomura said it estimates Q4 NSV growth in the segment at 28% YoY. However, the growth in the fashion vertical in FY23 is expected to be lower than earlier estimated, the brokerage said.
DroneAcharya Continues To See Volatility
Shares of India’s first listed drone startup DroneAcharya have been facing volatility since February. After becoming the second-biggest loser last year by falling over 7%, DroneAcharya emerged as the biggest winner this week.
Its shares rose 10% this week, ending at INR 134.95 on the BSE.
The startup, which got listed in December 2022, announced this week that it has successfully concluded the pilot stage of drone manufacturing. It aims to commence commercial production, assembly and export of drones from June this year, in partnership with GridBots Technologies.
Nazara’s Acquisition Spree Continues
Gaming and esports major Nazara Technologies continued its rising streak and gained 6.2% this week, ending the last trading session at INR 548.5 on the BSE.
The startup, which has been on an acquisition spree over the last year or so, announced a deal with Singapore-based mediatech startup Branded this week. Its wholly-owned subsidiary NODWIN Gaming acquired a 51% stake in the company at a deal value of $1.3 Mn.
The new acquisition came within three weeks of Nazara’s subsidiary Sportskeeda saying it would acquire a 73.27% stake in Pro Football Network LLC for $1.82 Mn. On Friday, Nazara announced the completion of this deal.
While Nazara continues to grow, regulatory uncertainties around online gaming have kept the growth rate in check. The startup has taken cautious steps to explore more opportunities in the real money gaming segment.
Shares of Nazara are currently trading 5.5% lower YTD.
