Zomato, Ola Electric Amid Losers In A Mixed Week For New-Age Tech Stocks

SUMMARY

Ahead of the start of the earnings season, 20 out of the 32 new-age tech companies under Inc42's coverage declined in a range of 0.18% to just under 19%

The mixed week for new-age tech companies comes despite benchmark indices continuing their recovery this week after an extended bearish sentiment over the past few months

Overall, the total market cap of the 32 new-age tech stocks stood at $74.07 Bn at the end of the week as against $76.65 Bn in the preceding week

It was a mixed week for new-age tech stocks on the bourses, despite a rally in the broader Indian market in the final week of FY25. Ahead of the start of the earnings season, 20 out of the 32 new-age tech companies under Inc42’s coverage declined in a range of 0.18% to just under 19%.

BSE SME-listed Veefin Solutions continued its losing streak this week, seeing about 60% erosion in its share prices since January 1. Shares of Veefin slumped 18.96% to end the week at INR 268.70.

EaseMyTrip was the second-biggest loser this week, dropping 13.51% to end the week at INR 11.72. The decline came despite the company announcing a number of new business initiatives this week, including acquisition of a stake in charter aviation company Big Charter Pvt Ltd.

Other losers this week included Ola Electric, MobiKwik, Swiggy, Zomato and PB Fintech.

Meanwhile, 12 new-age tech companies gained in a range of 0.57% to just under 12% this week. NSE SME-listed Menhood gained the most this week, ending 11.48% higher at INR 170. With this, the company’s shares have rallied over 60% from its listing price.

During the week, Menhood parent Macobs Technologies saw major rejigs on its board. Its independent directors Priya Goel and Sunil Kumar Rana resigned and were replaced by Rachna Agarwal and Chetan Kumar Joshi.

Other gainers this week included Paytm, TAC Infosec, Honasa Consumer, Nykaa, BlackBuck, among others.

Amid the list of gainers, coworking space provider Awfis’ shares zoomed 7.08% to end the week at INR 662.30. Meanwhile, markets regulator SEBI kept the IPO papers of Awfis’ competitor, WeWork India, in abeyance.

Overall, the total market cap of the 32 new-age tech stocks stood at $74.07 Bn at the end of the week as against $76.65 Bn in the preceding week.

Markets Rally Ahead Of Q4 Earnings Season

The benchmark indices continued their recovery this week after the extended bearish sentiment over the past few months. While Sensex gained 0.6% to end the week at 77,414.92, Nifty 50 moved up close to 200 points from last Friday’s close to end at 23,519.35

The key reason behind the bear run over the last few months was the exodus of foreign institutional investors from the Indian market. After persistent selling, the latter half of March saw FIIs buy into the Indian equities market.

Analysts attributed the return of FIIs to correction in valuations in Indian equities from the peak of September 2024.

“Going forward, the trend in FII flows will depend mainly on US President Donald Trump’s reciprocal tariffs, expected to kick in on April 2. If the tariffs are not severe, the rally may continue,” said VK Vijayakumar, chief investment strategist at Geojit Investments.

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

BofA Securities Cautious On Zomato & Swiggy

Zomato and Swiggy had a tumultuous week, which saw BofA Securities downgrade the food delivery giants.

While Zomato dropped 11.45% to end the week at INR 201.50, Swiggy’s shares slid 5.88% to INR 329.90.

In a note on Thursday (March 27), BofA said it expects losses in the quick commerce segment to continue for both Zomato and Swiggy over the next 12 to 15 months due to their expansion spree and intense competition.

BofA also sees a slowdown in the growth of the food delivery segment. The brokerage expects year-on-year gross order value (GOV) growth for food delivery to decelerate to 16-18% in the coming quarters, down from the previously expected 20%.

Due to these reasons, the firm revised its rating for Zomato to ‘Neutral’ from ‘Buy’. It also cut its price target (PT) for Zomato to INR 250 from INR 300 per share previously. For Swiggy, it revised its rating to ‘Underperform’ from ‘Buy’ earlier and reduced the PT to INR 325 from INR 420.

Zaggle’s Acquisition Spree Continues

Fintech SaaS company Zaggle doubled down on its inorganic growth plans this week. On Tuesday (March 25), the company acquired an additional stake worth INR 7.25 Cr in digital payments service provider Mobileware Technologies to increase its shareholding to 38.34%.

Later during the week, it also announced plans to acquire a 45.33% stake in point of sale (PoS) software solutions provider Effiasoft for INR 36.72 Cr in an all-cash deal. On Friday (March 28), it onboarded Wonder Home Finance as a client for its employee expense management and benefits offerings.

In December, the company raised nearly INR 595 Cr via qualified institutional placement (QIP) to enable its acquisition spree. Back then, sources within the company told Inc42 that Zaggle would eye three more investments and acquisitions by the end of March 2025.