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After new-age tech companies reported better-than-expected June quarter (Q1FY23) results, analysts said it will be a long road to recovery for their respective businesses and the stock prices.
Moreover, brokerages differ on whether it is the right time to own these stocks.
The common thread, however, that runs across most brokerages is Zomato, where they suggest buying the stock with the one-year target price ranging between Rs 60 – 115, translating into an upside of around 9 – 109 per cent from the current levels.
The company's gross order value (GOV) of food delivery jumped 10 per cent quarter-on-quarter (QoQ) and 42 per cent year-on-year (YoY) in Q1, aided largely by growth in volume, and mild growth in average order value (AOV) at 1-2 per cent. The company also broke even on an adjusted Ebitda basis during the quarter.
"We will look out for commentary on the demand outlook for FY23-24, further colour on the path to profitability, and views on the acquisition timelines, and consolidation of Blinkit… We believe the growth drivers continue to remain strong and losses continue to reduce QoQ, which is a positive," UBS said in its post result note.
On the other hand, analysts at CLSA and JM Financial maintain a 'Sell' rating on Paytm, with targets of Rs 650 and Rs 525, as they believe growth is still some time away and there are downside risks.
Jefferies, meanwhile, has maintained 'Buy' on Nykaa but has cut Ebitda and net profit estimates consequent to higher costs in Q1.
"We trim our FY2023-25 Ebitda forecasts on lower margin assumptions and higher investments in new businesses.
"This results in a 10-25 per cent EPS cut for FY2023-25 and a revised fair value of Rs 1,770 (Rs 1,835 earlier),” Kotak Institutional Equities said on Nykaa.
At the bourses, Zomato has slipped 3.5 per cent during the past three months, and Nykaa has shed 2 per cent. Paytm, on the other hand, has surged 41 per cent during the period.
In comparison, the BSE Sensex rallied 7 per cent, BSE data shows.
"Paytm continued its growth trajectory as gross merchandise value (GMV) grew 14 per cent QoQ to Rs 3 trillion.
"Its gross take rate declined 4 basis points QoQ to 36 basis points (bps).
"We believe it was driven by a higher UPI share and an Rs 27-crore hit to revenue due to the rationalisation of unprofitable merchants.
"We increase our FY23/24 net take rate assumptions by 1bp to 13/14bps," CLSA said.
Paytm's consolidated loss narrowed to Rs 644.4 crore in the first quarter of FY23, relative to Rs 761-crore loss in Q4FY22.
The consolidated revenue stood at Rs 1,680 crore during the recently concluded quarter.
Nykaa’s Q1FY23 quarterly and yearly GMV growth of 20 per cent and 47 per cent, respectively, said analysts at JM Financial, suggests that the company has a consumer base with a larger dispensable income and it doesn’t easily get disrupted by macro environments such as inflation risks.
Consolidated GMV reached Rs 2,490 crore during the quarter under review, driven by 18 per cent/21 per cent/51 per cent sequential growth in beauty and personal care (BPC)/Fashion/Others.
“These numbers are highly impressive in the current macro environment.
"We would have preferred a higher growth in Fashion as it is on a small base in a larger market with 16 per cent digital penetration,” they said.
Global brokerage Morgan Stanley has an ‘Overweight’ rating on Nykaa as Q1 numbers were ahead of its estimates.
Key positives, it said, included good top-line growth in BPC and Fashion segments, and stable margin in Fashion.
