Most New-Age Tech stocks are slumping this week as the broader stock market comes under pressure

A majority of new-age technology stocks fell this week amid a severe slump in the overall Indian stock market on mounting concerns over inflation and fears of further rate hikes from the US Fed.

However, despite the pressure, PB Fintech emerged as the biggest winner by rising almost 19% on the BSE this week.

Besides the fintech major, Delhivery, Zomato, MapmyIndia and Nykaa also rose in the 1% to 7% range this week.

Delhivery’s gains came despite major pre-IPO investor Tiger Global losing its stake in a bulk deal.

On the other hand, RateGain was the biggest loser among listed tech startups, with a 7.5% drop on the BSE this week. Shares of DroneAcharya, last week’s biggest gainer, fell 6.7% this week.

In the broader equity market, benchmark indices Sensex and Nifty50 fell 2.5% and 2.7% to 59,463.93 and 17,465.80 respectively.

“Most global stock markets witnessed corrections this week as markets appeared concerned about future Fed action due to higher-than-expected recent inflation numbers. Indian markets have also been hit as the growth-inflation mix remains somewhat worrying,” said Shrikant Chouhan, head of equity research (retail) at Kotak Securities.

Siddhartha Khemka, head of retail research at Motilal Oswal, believes the market is likely to consolidate in the near term if there are no new triggers.

Next week, investors will be guided by macro data, including gross domestic product (GDP) and purchasing managers’ index (PMI) data.

This week, let’s take a closer look at the performance of some of the emerging technology stocks.

The 14 new-age technology stocks under our coverage ended the week with a total market cap of $26.55 billion compared to $26.17 billion last week.

Tiger Global relieves stake in Delhivery

Shares of logistics startup Delhivery continued their journey north this week, despite a slight mid-week slump that followed Tiger Global’s Internet Fund III redeems 1.2 Cr of its shares.

The VC fund sold 1.7% of its stake in Delhivery on Wednesday in a bulk deal worth INR 414.2 Cr. As of December 31, 2022, Internet Fund III owned a total of 3.4 Cr shares of Delhivery, or a stake of 4.68%.

Shares of the logistics startup are up nearly 7.3% this week, ending Friday’s session at INR 352.25 on the BSE. The stock also ended the last session of the week in the green zone, up 2% from Thursday’s closing price.

Shares of Delhivery have regained momentum following the announcement of Q3 FY23 results earlier this month. Delhivery reported a consolidated net loss of INR 195.6 Cr up 54.6% year-on-year (YoY) in the quarter. However, the loss was a 23% sequential decline from INR 254 Cr in Q2 FY23.

Meanwhile, brokerage JM Financial started its coverage of Delhivery this week with a ‘hold’ rating and a price target (PT) of INR 350. The PT currently implies a downtrend of 0.6% until the stock’s latest close.

The brokerage said it expects Delhivery to maintain its market share in express parcels, with growth driven by increasing online retail penetration and the emergence of new e-commerce business models.

“We expect Delhivery to show high marginal profitability for just a few more quarters and then normalize to 25%-30%. However, a continued growth path would allow Adj. EBITDA margin is constantly increasing and reaching 12%-15% in ten years,” it said.

JM Financial said further growth of the stock will largely depend on the macroeconomic environment.

Meanwhile, in a research note published this week, Kotak Institutional Equities maintained a buy rating on Delhivery and a fair value of INR 395 implying an increase of more than 12% till the share’s latest close.

On the other hand, HDFC Securities technical research analyst Vinay Rajani said in a note this week that Delhivery share price has surpassed 50-day exponential moving average (EMA) resistance. The price increase is also accompanied by increasing volumes. He pegged the stock’s stop loss to INR 335.

Shares of PB Fintech at a 6-month high

Shares of PB Fintech, the parent company of Policybazaar, rallied in all five sessions this week, rising 18.9% on the BSE to end Friday’s session at INR 576.1.

Despite a slump in the broader market on Friday, shares of the fintech major rose 10.5% on the day compared to Thursday’s closing price. It was the biggest riser among new-age technology stocks this week.

Also, PB Fintech is the biggest winner in the Nifty500 index this month, with the stock up more than 37%.

It should be noted that shares of PB Fintech saw a serious decline from June last year. The shares fell by more than 52% in 2022.

However, the stock has witnessed upward momentum since it reported optimistic Q3 FY23 results. PB Fintech’s consolidated net loss decreased by 70.6% during the quarter to INR 87.6 Cr. In addition, the company also said its lender Paisabazaar broke even on an adjusted EBITDA level in the quarter.

With a market capitalization of INR 25,931.2 Cr, the shares are currently trading at a level last seen in August 2022.

RateGain becomes the biggest loser

Shares of the traveltech SaaS startup fell in four consecutive sessions this week, becoming the biggest loser among newly listed tech stocks.

Shares of RateGain fell nearly 7.5% to end Friday’s session at INR 345.05.

Cloud-Based Property Management Platform for Hotels HotelKey this week announced a partnership with RateGain to integrate its global distribution, central reservations and pricing capabilities into HotelKey’s PMS platform. However, the announcement did not have a major impact on the stock’s performance.

Shares of RateGain fell after more than a month of rallying following the startup’s announcement acquisition of data exchange platform Adara for $16.1 million in January.

Earlier this month, the startup reported a 147X YoY jumped in his after-tax profit (PAT) to INR 13.3 Cr in Q3 FY23, with a 39.7% increase in operating income to INR 138.3 Cr.