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SUMMARY
Fourteen out of the 19 new-age tech stocks under Inc42’s coverage declined this week in a range of 0.8% to over 9%
Mamaearth, Zomato, MapmyIndia, CarTrade Technologies, and Paytm gained this week in a range of 0.06% to almost 9%
Benchmark indices Nifty50 gained 1.04% during the week to close at 22,326.90, while Sensex rose 1.13% to end at 73,635.48 on Thursday (March 28)
The Indian new-age tech stocks witnessed some downtrends in the last trading week of FY24, in line with the selling pressure on IT stocks in the broader market. However, despite the initial period of volatility, the overall domestic market regained momentum.
Fourteen out of the 19 new-age tech stocks under Inc42’s coverage declined this week in a range of 0.8% to over 9%, with DroneAcharya becoming the biggest loser. RateGain, Yatra, EaseMyTrip, Nykaa, PB Fintech, ideaForge, and Nazara were also among the losers.
Meanwhile, Mamaearth, Zomato, MapmyIndia, CarTrade Technologies, and Paytm gained in a range of 0.06% to almost 9% during the week.
Mamaearth emerged as the biggest winner, jumping 8.7% on the BSE, with its shares gaining sharply in all three trading sessions.
Imperative to mention that the week had three trading sessions, as the market remained closed on Monday (March 25) on the occasion of Holi and on Friday (March 29) for Good Friday.
Benchmark indices Nifty50 gained 1.04% during the week to close at 22,326.90, while Sensex rose 1.13% to end at 73,635.48 on Thursday (March 28).
Vinod Nair, head of research at Geojit Financial Services noted that FY24 marked a rewarding period for the Indian market, though the year ended on a subdued note, with substantial selling pressure remaining until March 20.
“Nevertheless, there has been some relief in the market in recent trading sessions as the pressure from leveraged selling has eased and buying activity has improved, albeit at lower volumes… As we move on to a new financial year, we express optimism towards sectors such as pharma, capital goods, and infra, as we see them as key growth drivers, supported by both domestic and external demand,” Nair said.
Meanwhile, he noted that some sectors like FMCG and IT are facing challenges due to subdued demand at present, but a turnaround is anticipated on the back of a normal monsoon and increased US demand following the Fed’s rate cut.
“However, the focus is on large caps, as the premium valuation of midcaps could have a hiccup in the short to medium term,” Nair added.
The upcoming general elections will be a key driver in the stock market in the coming months.
Now, let’s take a look at the performance of some of the new-age tech stocks this week.
The total market capitalisation of the 19 new-age tech stocks under Inc42’s coverage stood at $46.56 Bn at the end of this week as against $46.05 Bn last week.
Zomato’s New All-Time High
As a testament to its strong bullish momentum, shares of food tech major Zomato rallied sharply to touch a fresh all-time high at INR 188.95 on Wednesday (March 27) on the BSE.
Overall, the shares gained 4.7% during the week and ended the last trading session of FY24 at INR 182.35 on the BSE.
We must note that brokerages continue to remain bullish on the stock. This week ICICI Securities raised its price target (PT) on Zomato to INR 300 from INR 182 earlier.
Zomato remains its top pick in the Indian internet space, the brokerage said. It raised the PT due to a significant increase in its long-term explicit forecasts, given the improved visibility on Zomato’s sustained growth trajectory and sustained improvement in profitability metrics, ICICI said.
It is also pertinent to note that Zomato shares remained steady even amid the launch of its ‘Pure Veg Fleet’ last week and the subsequent backlash on social media platforms. Also, addressing the matter further, company cofounder and CEO Deepinder Goyal said this week that he was taken aback by the backlash as the decision was taken based on a survey.
“We had done a large survey of people who are more than 50 years old. An overwhelming majority said they needed a veg-only option and preferred veg-only restaurants… So, we launched it. We had not expected such an uproar,” he said in an interview with another publication.
Commenting on the stock, Jigar S Patel, senior manager and technical research analyst, at Anand Rathi, said that in the next few days, the INR 185 level would be a massive resistance for Zomato.
However, if it manages to close above that level, the shares might trade further higher to test INR 190-INR 195 level.
Shares of Zomato have gained almost 50% year to date.
DroneAcharya Emerges As The Biggest Loser
Shares of drone startup DroneAcharya, which were in a correction mode since February this year, fell 9.3% on the BSE this week.
Losing in all three trading sessions, DroneAcharya ended the last trading session of the current fiscal at INR 129.15 on the BSE.
Its shares nosedived even as the BSE SME-listed startup made important announcements this week.
DroneAcharya said that it secured a “significant” contract from one of the Indian Army’s Artilleries from Eastern Command for supplying FPV (First Person View) drones with night vision capability.
The company also said that it achieved a milestone by securing a drone supply order worth INR 1.84 Lakh from the Eastern Command of the Indian Army, Ministry of Defence. The order initiates a larger-scale engagement, with two other work orders – drone supply with night vision and drone pilot training.
While shares of DroneAcharya gained sharply in 2023, they have already declined 33% so far this year on the BSE.
Anand Rathi’s Patel said that if the stock manages to remain above the INR 125 level, it could reverse from here on and touch INR 145 in the next one to two weeks.
EaseMyTrip Bolsters Its B2B Playbook
The online travel aggregator EaseMyTrip said that it was looking to invest INR 33 Cr ($3.9 Mn) in B2B travel Portal E-Trav Tech Limited, acquiring a 4.94% stake in the company.
E-Trav Tech provides travel API to businesses, including flight APIs, holiday packages, hotel APIs, and bus APIs, among others, which allows travel companies to offer competitive travel deals and content from global travel suppliers.
Shares of EaseMyTrip plunged in two consecutive trading sessions this week. Overall, the stock fell more than 2%, ending the week’s last trading session at INR 42.89 on the BSE.
Anand Rathi’s Patel said that the support for the stocks is currently at INR 40-INR 41 but there is also a bullish pattern created at this level.
Hence a reversal is possible once the stock touches this critical support zone and could rally till INR 48-INR 49 in the next one to two weeks, he added.
