 "Don't rush to buy new-age co's stocks despite good Q2 results: Analysts")
Even as the performance of India Inc. was subdued during the September quarter (Q2FY25), a number of new-age companies have stood out with a healthy showing.
Zomato, PB Fintech (the parent of Policybazaar and Paisabazaar), and FSN E-Commerce Ventures (which owns Nykaa) have all reported robust numbers, reflecting growth and resilience.
Only One 97 Communications, the parent company of Paytm, has struggled with its financial performance during the quarter under review.
Even though the parent company of Paytm struggled with its financial performance during the quarter under review, the stock has surged post the Q2 results.
Since their Q2 results, individually, Zomato (result announced on October 22) shares have gained 5.2 per cent, PB Fintech (November 5) has risen 5.2 per cent, and Paytm (October 22) is up 11.9 per cent.
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On the other hand, Nykaa (November 12) shares have lost 3.8 per cent and Ola Electric (November 8) declined 3.6 per cent.
Despite the operational performance, analysts suggest investors shouldn’t rush to buy these stocks just yet in the backdrop of market uncertainty.
Investors, they suggest, should wait for a couple of quarters to see whether the operational performance of these companies sustains before making a fresh investment.
“I don't see a great opportunity to 'buy' at least for two or three quarters. Growth in new-age companies has already been priced in since their listing as they were more perception-driven than fundamental,” said G Chokkalingam, founder, Equinomics Research.
Among individual stocks, Nykaa's shares declined as the numbers, even though healthy, were below estimates.
The company reported a consolidated net profit (attributed to owners) for the September quarter at Rs 10.04 crore compared to Rs 5.85 crore in the same period a year ago, up 72 per cent.
Revenue from operations for the quarter stood at Rs 1,874.74 crore compared to Rs 1,507.02 crore a year ago, which implies a rise of 24.2 per cent.
Zomato's profit after tax (PAT) jumped five times to Rs 176 crore in the quarter under review from Rs 36 crore a year ago.
Its revenue from operations, too, rose 69 per cent year-on-year (Y-o-Y) to Rs 4,799 crore in Q2 from Rs 2,848 crore a year ago.
PB Fintech, on the other hand, reported a net profit of Rs 51 crore in Q2FY25 compared to a Rs 21 crore loss in the corresponding period a year ago.
The company's revenue grew 44 per cent at Rs 1,167.23 crore in Q2 from Rs 811.63 crore a year ago, up 43.8 per cent.
From an investment perspective, Ambareesh Baliga, an independent market analyst, believes that most positives are priced in for new-age firms.
He added, “New-age companies started on a lower base in terms of profitability and the rise/ improvement in operational performance is already priced in. Investors should stay on the sidelines for now and use sharp dips in these stocks to buy from a long-term perspective.”