Shares of new age firms such as Cartrade Tech, Policy Bazaar┬аand Nykaa have plunged up to 60 per cent this year, raising concerns among investors about the future of their holdings. While shares of multi-channel auto platform Cartrade Tech are down 33 per cent, stock of PB Fintech, the operator of Policy Bazaar has plunged 59.38 per cent ┬аthis year. The shares of fashion retailer Nykaa listed as FSN E-Commerce Ventures Limited have declined 49 per cent during the period. ┬а
It’s interesting to note that all the three firms made their market debut last year. ┬а
Policy Bazaar stock made its debut at a premium of 17 per cent over the IPO issue price of Rs 980 on November 15, 2021. ┬аSince then, the stock has plunged 60.61 per cent till date. The stock was trading 0.43 per cent higher at Rs 386.20 on BSE today.┬а
Policy Bazaar shares are trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. However, Policy Bazaar shares were trading nearly 3.12 per cent higher against the 52-week low of Rs 373.10.┬а
ALSO READ: Policy Bazaar shares down 74% from record high, good time to buy?┬а
Shares of another new age firm Cartrade Tech made a weak debut as it listed with a 1.11% discount to the issue price of Rs 1,618 ┬аon August 20, 2021. Since then, the stock has plunged 64.64 per cent till date. The stock was trading 0.09 per cent lower at Rs 572.40 on BSE today. The stock has been losing for the last three days. Cartrade Tech stock is trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has lost 54.47 per cent in a year and fallen 8 percent in a month.┬а
Shares of Nykaa made a stellar listing on bourses on November 10 last year, gaining 82 per cent to Rs 2,054 against the IPO issue price of Rs 1,125.┬а
Since listing, the stock has plunged 47.61 per cent till date. The stock was trading 3.07 percent lower at Rs 1076.50 on BSE today. The stock has been losing for the last two days. ┬аIt hit an all-time low of Rs 1070, down 3.66 per cent today. In a month, the stock has declined 16.51 per cent.
ALSO READ: Has the Nykaa stock bottomed out? Here’s what investors should do┬а
With shares of the three new age firms erasing considerable investor wealth since their debut, the outlook of these stocks looks uncertain. Are they good picks at the current levels or likely to fall further? Here’s a look at what brokerages and analysts said about the prospects of these stocks.┬а
Japanese brokerage Nomura maitained a buy call on Cartrade Tech but reduced its target price to Rs 782 from the earlier Rs 820. The reduced target price still implies an upside of 28.2 per cent to the closing price of Rs 610 on October 21, 2022.┬а
“We value the company on SOTP (EV/Sales – 9x for classifieds, 10x to abSure and 6x to Shriram Automall India Private Limited (SAMIL), benchmarked to global multiples, on Sep-24F to arrive at a target price of Rs 782 (Rs 820 earlier). The stock currently trades at 6.4x/36.8x FY24F EV-Sales/EV-EBITDA (factoring in 51% interest in SAMIL) and has 30% of market cap as cash on books, which we think is attractive. We reiterate our Buy rating,” said Nomura.
Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking believes that Policy Bazaar stock is likely to fall further to a low of Rs 300 to Rs 310.┬а
“Relentless selling pressure since the listing date has resulted in with a decline of over 73% from its all-time high of 1470. On technical parlance, sequential lower low formation has exhibited that the broader trend in the stock continues to be negative and until and unless it trades decisively above the immediate swing high of Rs 500, it is likely to remain so. To add further agony, in technical parlance presence of bearish symmetrical triangle formation for the past few months has increased probability of further slide in prices hereon and lower target of ┬аRs 300-310 can be seen in near term. However, due to the oversold reading in oscillator, some amount of relief rally or price consolidation can be seen in short term before embarking its journey further lower,” said Das.┬а
Abhijeet at Tips2trade said the stock looks weak and can be bought only on daily close above Rs 405. “In continuation of the theme of a sharp correction in almost all of the stocks listed over the past two years, not surprisingly Policy Bazaar stock price has also taken a beating despite being a strong platform based business. The stock looks weak and a fall till Rs 340 looks possible. Investors should buy only on daily close above Rs 405,” said ┬аAbhijeet.┬а
Kotak Institutional Equities in a note last week said that the cost of digital advertising is set to remain elevated for Nykaa, given high competition among brands to target specific customers and high cost of influencers. “Nykaa’s BPC business should continue to be unaffected, as it is an advertising platform itself; the fashion business could see elevated ad spends. We bake in delayed profitability of this vertical, resulting in a 16-21 per cent cut in the FY2023-25 EPS and a new FV of Rs 1,640. The stock price correction is an opportunity to BUY,” it said.┬а
Another brokerage Nomura India last week initiated coverage on Nykaa with a target of Rs 1,365, factoring in an 18 per cent revenue growth compounded annually over FY25-40 into its target. The foreign brokerage, which sees Nykaa’s Ebitda margin stabilising at 18 per cent level, does not rule out the potential for the stock to double over next five years.┬а
JM Financial said the stock has valuations that are at a premium to most loss-making new age companies. Despite this, the brokerage expects the Nykaa’s premium to sustain, as not many companies are estimated to deliver gross merchandise value CAGR of 41 per cent, revenue CAGR of 39 per cent and Ebitda CAGR of 71 per cent over FY22-27 period.┬а
“We have a ‘BUY’ rating on the stock with a September 2023 target of Rs 1,780 and believe any short-term dip should be a great accumulation opportunity for investors looking to build long-term positions in Nykaa,” the brokerage said.
