SUMMARY
Nine out of the 14 new-age tech stocks under Inc42’s coverage gained this week, with PB Fintech emerging as the biggest gainer with 10.4% rise on the BSE
Shares of Nykaa slumped 10.7% following reports of multiple top-level registrations at the startup last week
In the broader equity market, Sensex rose 2.5% to 58,991.52 this week while Nifty50 gained 2.4% to 17,359.75
Indian new-age tech stocks got some relief this week as the overall Indian stock market recovered, ending the financial year 2022-23 (FY23) on a positive note.
Nine out of the 14 new-age tech stocks under Inc42’s coverage gained this week. PB Fintech emerged as the biggest winner, with its shares surging 10.4% on the BSE.
Other listed tech startups, including EaseMyTrip, Paytm, Delhivery, Nazara Technologies, and Zomato, also gained in the range of 0.6% to over 7% this week. The gains were driven by business-specific updates as well as the positive momentum in the overall equity market.
However, shares of beauty ecommerce major Nykaa slumped 10.7% following multiple top-level resignations at the startup last week.
DroneAcharya, MapmyIndia, Tracxn, and Fino Payments Bank also fell this week, declining between 2% and 7%.
In the broader equity market, Sensex rose 2.5% to 58,991.52 this week while Nifty50 rose 2.4% to 17,359.75.
The stock market was closed on Thursday (March 30) on the occasion of Ram Navami.
“Markets saw a perfect ending to FY23 as charged-up bulls went berserk on Dalal Street, thus propelling both the benchmark indices to close above the psychological mark,” said Amol Athawale, deputy vice president, technical analyst, at Kotak Securities.
“The rally was long overdue as fading worries over the recent turmoil in the US and European banking industry prompted investors to latch upon the beaten down stocks. Also, falling US bond yields and the return of FIIs (foreign institutional investors) into the local markets in recent sessions have bolstered the market sentiment,” he added.
While the week ended on a positive note after the slump in the last few weeks, analysts are of the opinion that volatility will continue in the market.
Markets will continue to focus on inflation numbers across key economies and related actions of the central banks. Domestic markets will keenly watch out for the Reserve Bank of India (RBI) policy meeting scheduled next week, said Shrikant Chouhan, head of equity research (retail) at Kotak Securities.
Besides, the Q4 results of companies in the coming weeks will also play a role in shaping the market sentiment.
Now, let’s further 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 $26.31 Bn as against $25.01 Bn last week.
Paytm Shares On The Move
Shares of fintech major Paytm continued the rally this week as well, gaining around 3% after rising over 7% last week amid positive business updates.
Though there was a slight slump mid-week, Paytm shares bounced back and gained in two consecutive sessions. The shares ended Friday’s session at INR 637, up over 1% compared to Thursday’s close.
In The News For:
- The RBI gave an extension to Paytm to resubmit its application for a payment aggregator (PA) licence
- Paytm Payments Bank Ltd (PPBL) said this week that it would enable interoperability of its wallet for UPI transactions, adhering to the recent guidelines issued by the National Payments Corporation of India (NCPI).
Following the announcement on wallet interoperability, several analysts, including those from Citigroup and Morgan Stanley, said that it would be an additional revenue stream for PPBL, as merchants will have to pay an interchange fee of 1.1% on transactions of above INR 2,000 made through prepaid payment instruments (PPI) like Paytm wallet.
“If well adopted by Paytm wallet users/merchants, the benefit could be meaningful, as Paytm Payments Bank is the largest issuer of KYC wallets with more than 100 Mn users,” said Morgan Stanley, which has ‘equal-weight’ rating and INR 695 price target on the stock.
At the current market price, Paytm is a good buy, said Ganesh Dongre, senior manager, technical research at Anand Rathi.
The next target is INR 700 and INR 710-INR 720 is a big resistance for Paytm. Its stoploss is INR 550, he added.
Nykaa The Biggest Loser
Shares of Nykaa slumped in all four sessions this week making it the biggest loser among the new-age tech stocks. The shares declined almost 10.7% this week.
On Friday alone, Nykaa shares fell 2.9% to INR 123.1 on the BSE.
The slump came after five senior executives reportedly quit the company. Reuters reported last Friday that Nykaa’s chief commercial operations officer Manoj Gandhi, CEO of wholesale business Vikas Gupta, and chief business officer of fashion vertical Gopal Asthana, left Nykaa.
Besides, two vice presidents also tendered their resignations.
Nykaa hasn’t issued any public statement on the mass exodus so far.
Commenting on the stock, Dongre said Nykaa is facing continuous selling pressure. A further decline is possible and the stock can touch a bottom of INR 110-INR 115.
PB Fintech At Almost A 10-Month High
Shares of PB Fintech rallied in all four sessions this week to emerge as the biggest gainer, jumping about 10.4% this week to end Friday’s session at INR 638.85 on the BSE.
The shares are currently trading at a level last seen at the beginning of June last year.
While announcing its Q3 results in February, PB Fintech said that its lending vertical Paisabazaar achieved break even on an adjusted EBITDA level during the quarter. The share seems to be on a positive trajectory since then.
PB Fintech is also one of the top 20 gainers in the Nifty 500 index over the last one month.
Commenting on the stock, Anand Rathi’s Dongre said that it is a good time to book profit.
Holding and buying on dips would be a good strategy for the stock, he said, adding that the stop loss for it is around INR 540 and the target is INR 700.
