Mixed Week for New-Age Tech Stocks; CarTrade Emerges as Biggest Winner After Q2 Earnings
Three points you will get to know in this article:
- Indian new-age tech stocks delivered mixed results last week, led by gains in CarTrade Technologies following positive Q2 FY23 earnings, while six stocks including RateGain and Paytm witnessed losses.
- The week saw the listing of Honasa Consumer, the parent company of Mamaearth, on Indian bourses amidst varied market performance.
- Despite the decreased likelihood of a rate hike per the US Fed chair’s speech, headline inflation remains above the US central bank’s target, leading to a focus on upcoming inflation data.
After experiencing a notable surge in the previous week, the performance of Indian new-age tech stocks showed a diverse outcome this week, mirroring the overall market’s subdued response to global uncertainties.
Out of the 18 new-age tech stocks monitored by Inc42, eleven demonstrated gains ranging from 0.4% to an impressive 26% over the past week. Notably, CarTrade Technologies stood out as the top performer, fueled by its positive Q2 FY23 earnings report.
Other notable gainers included Tracxn Technologies, which saw a substantial uptick of approximately 23%, Yatra with a gain of over 7%, Nykaa boasting a 6.8% increase, Zomato experiencing a 4.2% rise, and Nazara Technologies posting a modest gain of 1.3% over the week. This dynamic performance underscores the varying fortunes within the new-age tech sector, reflecting the complex interplay of market forces.
Some of the new-age tech stocks, such as RateGain, Fino Payments Bank, Paytm, and EaseMyTrip, saw their share prices decline between 0.9% and 4% this week. Yudiz, on the other hand, did not change its value.
This week also marked the debut of Honasa Consumer, the parent company of D2C unicorn Mamaearth, on the Indian stock exchanges. The market ended the week on a positive note, with the benchmark indices Sensex and Nifty50 rising 0.8% and 1%, respectively. After facing some resistance, the market recovered and closed higher. Sensex finished the week at 64,904.68, while Nifty50 settled at 19,425.35.
“According to Vinod Nair, Head of Research at Geojit Financial Services, the Indian market finds itself in a tight spot due to the fluctuating global sentiments, sparked by a larger-than-anticipated decline in Chinese exports. This emphasizes an ongoing global trade slowdown. It’s like the market is navigating through uncertain waters, trying to find its way amid these international waves.”
CarTrade Touches 52-Week High
CarTrade Technologies experienced a remarkable surge on Friday’s intraday trading (November 10), soaring by an impressive 20% and reaching a new pinnacle of INR 874.5 on the BSE. The exuberant rally propelled the stock to its upper price band for the day.
However, some of these gains were relinquished later in the day, but the stock still settled 19% higher at INR 867.3 on the BSE. CarTrade Technologies outshone others in the market, emerging as the top performer for the week with an overall gain of 25.6%.
Throughout the week, the stock consistently trended upward, and the peak was reached on Friday, coinciding with the company’s announcement of Q2 FY24 results. This positive outcome significantly contributed to the surge, making CarTrade Technologies the standout success story for the week.
Last Thursday marked a significant milestone for the startup as it unveiled an impressive 132% year-on-year surge in its second-quarter after-tax profit, accompanied by a remarkable record revenue of INR 314.33 Crores.
Although the net profit experienced a slight 4% sequential dip, it’s essential to bear in mind that the Q2 figures also encompassed the performance of the recently acquired OLX India business. This strategic acquisition played a key role in shaping the overall financial picture for the quarter.
Sharing insights about the stock, Rupak De, a seasoned technical analyst with LKP Securities, remarked that after the recent breakout, the stock is currently facing resistance at approximately INR 900.
Should the stock manage to surpass the INR 900 threshold, experts anticipate a continued upward momentum, reaching a potential range between INR 1,050 to INR 1,100 in the near future, as highlighted by De.
Remarkably, CarTrade shares have marked an impressive ascent, boasting an over 86% increase year to date (YTD). This robust performance underscores the positive trajectory the stock has maintained throughout the year.
Mamaearth Makes a Muted Market Debut
In a market that clearly favors profitable ventures, Mamaearth’s shares had a quiet debut. Just this week, Mamaearth’s shares made their appearance on the NSE, starting at INR 330, a modest 2% increase from the issue price of INR 324. Meanwhile, on the BSE, Mamaearth’s shares had a flat listing at INR 324.
However, after the Tuesday debut, the shares took a downward turn, closing Thursday at INR 302.15 on the BSE. The market’s aversion to companies operating at a loss seemed evident in the subdued performance.
It’s worth mentioning that considering the company reported a loss in FY23, a substantial offer for sale (OFS) portion in the IPO, and a valuation that many deemed on the higher side, there were already predictions that the stock might not attract much attention from everyday investors.
After the stock market debut, Prashanth Tapse, a seasoned VP research analyst at Mehta Equities, shared his thoughts. Despite some investors viewing it as a bit risky, there’s a positive sentiment about the long-term prospects, given the business model’s potential for substantial growth. However, it’s important to note that Mehta Equities remains cautious about Mamaearth.
Nykaa’s Q2 Numbers Divide Brokerages
Nykaa’s stocks experienced a notable uptick of 6.8% this week, propelled by the robust performance revealed in the Q2 FY24 results, particularly in the resurgence of its fashion segment. The beauty and fashion e-commerce behemoth demonstrated a substantial 23% year-over-year growth in the consolidated gross merchandise value (GMV) for its beauty and personal care (BPC) vertical, while the Nykaa Fashion sector exhibited an even more impressive 27% YoY growth.
Reflecting on the broader financial picture, Nykaa’s Q2 Profit After Tax (PAT) exhibited a remarkable 50% year-over-year surge, reaching INR 7.8 Cr, and demonstrated a substantial 44.4% sequential increase. Despite these positive strides, assessments from various brokerages were divergent regarding Nykaa’s Q2 earnings, which slightly fell short of market estimates.
Bernstein, in particular, pointed to intensifying competition in the beauty and personal care space as a contributing factor to this marginal miss. Taking a optimistic view of the fashion industry, JM Financial highlighted Nykaa’s commitment to maintaining its competitive advantage. According to them, Nykaa is set to stand out as the go-to platform for launching brands in the BPC sector. This is attributed to Nykaa’s effective marketing strategies, ensuring enhanced brand visibility, coupled with its high-quality and dedicated customer base.
Nykaa’s stock concluded the week at INR 149.85, marking a 1.7% increase from Thursday’s closing value. According to De from LKP Securities, the stock has established a solid foundation, and the key now is surpassing the INR 160 milestone to set the stage for a notable upswing in the short term.
The Indian market saw mixed performances in new-age tech stocks, with 11 out of 18 stocks under watch gaining between 0.4% to 26%. CarTrade Technologies led, due to positive Q2 FY23 earnings. However, six stocks including RateGain, Paytm dropped by 0.9% to 4%. The much-anticipated listing of Honasa Consumer, parent of Mamaearth, also occurred. Though a rate hike is deemed less likely following US Fed chair’s speech, headline inflation surpasses US Central bank’s target, with future emphasis on inflation data.
