New-Age Tech Stocks Surge As Markets Rally On Exit Polls’ Forecasts

Most of the new-age tech stocks rose on the bourses on Monday (June 3), in line with the rally in broader market as almost all the exit polls projected the Prime Minister Narendra Modi-led National Democratic Alliance (NDA) getting a comfortable majority in the Lok Sabha.

Brushing aside the bearish sentiment observed over the past two weeks, 14 out of the 23 new-age tech stocks under Inc42’s coverage gained in the range of 0.7% to about 13%. 

Last week’s top gainer Nazara Technologies continued its bull run and surged 12.31% to INR 788.40. 

With today’s rise, the shares of the gaming major have touched a three-month high. While the company’s net profit declined 98% to INR 18 Lakh in Q4 FY24 from INR 9.4 Cr in the year-ago quarter, its performance on certain metrics was better than the expectations of market analysts.

Meanwhile, Awfis, TBO Tek, Go Digit, Paytm parent One 97 Communication, Mamaearth parent Honasa were among the other stocks which gained today. 

Shares of coworking space provider Awfis Space Solutions zoomed 4.24% to INR 419.5 on the BSE. It is pertinent to note that the company made its public market debut last week on May 30 at a substantial premium on the bourses.  

Further, fintech major Paytm continued its upward movement today, gaining 4.08% to close the session at INR 375.95. 

Markets Cheer Likely Third Term For PM Modi

The rise in new-age tech stocks followed the trend in the broader market. Benchmark indices Sensex and Nifty50 touched their all-time highs during Monday’s session as exit polls predicted a third term for Prime Minister Narendra Modi. While Sensex rose 3.39% to end the session at 76,468.78, Nifty50 gained 3.25% to close at 23,263.90. 

Commenting on the market performance today, Motilal Oswal Financial Services’ Siddhartha Khemka said, “NDA 3.0 augurs well for the economy and capital markets as it provides stability and continuity in policy-making with a single-party majority government, which will be expected to continue pushing its economic growth agenda. Markets today heaved a sigh of relief, and after witnessing sharp volatility over the last two months, it can now go back to fundamentals.” 

Geojit Financial Services’ Vinod Nair echoed similar sentiment. “Exit poll has activated the optimism of a memorable win for the ongoing government…PSUs had a humongous rally in anticipation of continuation of the reform gains triggering further re-rate. The sustenance of the broad rally is anticipated to continue in-line with the magnitude of the actual tally… “ he said. 

The counting of the votes for the elections would take place on Tuesday (June 4).

Zomato Continues To Decline 

Despite the broader market surge, shares of nine startups like Zomato, TAC Infosec, and PB Fintech declined in the range of 0.9% to 4.4%. 

After touching a 52-week high of INR 207.3 last month, foodtech major Zomato’s shares have been on a downward spiral. On Monday, the stock fell 2.12% to INR 175.10 on the BSE.

The company’s shares are under pressure despite Zomato posting a net profit of INR 175 Cr in the fourth quarter of the financial year 2023-24 (FY24) and a profit of INR INR 351 Cr in FY24. 

On May 31, the stock tanked 5% after brokerage firm Macquarie reiterated its ‘underperform’ rating on the stock and predicted a 50% decline in the price over the next 12 months. It has a price target of INR 96 on the stock.

Macquarie said that JioMart’s entry into the quick commerce segment would increase the competition for Blinkit.