Paytm, Policybazaar, Zomato, and Nykaa rise up to 10% as new-age stocks come under scrutiny.
These equities underperformed the market over the past year, declining between 31% and 53% compared to the Sensex’s 5% increase.On Wednesday, strong volume helped shares of battered new-age internet companies rise up to 10% on expectations of improved financial performance. Shares of food aggregation platform Zomato, One97 Communications, which owns Paytm, PB Fintech, which owns Policybazaar, One97 Communications, which owns Paytm, Nykaa, and FSN E-Commerce Ventures all soared in intraday trade today by 5% to 10% on the BSE. The S&P BSE Sensex, in contrast, was up.Zomato, the food aggregator platform Policybazaar, and FSN E-Commerce Ventures, the parent firm of Nykaa, all had intraday price increases of between 5% and 10% on the BSE today. The S&P BSE Sensex, in contrast, was up 0.71 percent at 60,716. These equities underperformed the market over the past year, declining between 31% and 53% compared to the Sensex’s 5% increase. Paytm, one of the individual stocks, increased 10% today to Rs 647.55 thanks to a roughly four-fold increase in trading activity. It has increased 23% over the last three trading days as a result of the company’s better-than-expected third-quarter financial results (Q3FY23).
A combined 18 million shares had changed hands on the NSE and BSE till the time of writing of this report. In Q3FY23, Paytm’s Ebitda (earnings before interest, taxes, depreciation, and amortization), an indicator of operational profit, before ESOP cost margin, improved to Rs 31 crore. The company said it achieved operating Ebitda profitability three quarters ahead of guidance, driven by revenue growth across businesses, disciplined cost management, and operating leverage. Paytm narrowed its consolidated net loss to Rs 392 crore in Q3FY23. The company had posted a net loss of Rs 778.4 crore in the same period a year ago. Its revenue from operations jumped about 42 per cent to Rs 2,062.2
In the identical period a year prior, the company reported a net loss of Rs. 778.4 crore. From Rs 1,456.1 crore in the same quarter last year, its operating revenue increased by roughly 42% to Rs 2,062.2 crore this quarter. On a year-over-year basis, the contribution profit—which is net of taxes and marketing expenses—more than doubled to Rs 1,048 crore during the reported quarter. “Paytm reported adjusted Ebitda breakeven three quarters earlier than both street estimates and management’s initial guide of September 2023 aim. This was mostly due to an increase in the revenue mix from high margin loans, an increase in merchant subscription, a decrease in payment processing and promotional fees, “BofA Securities analysts noted. The brokerage house is rated as “Neutral.”worldwide brokerage On Wednesday, Macquarie twice upgraded the company from “underperform” to “outperform,” raising the target price by a stunning 80% as a result of the management’s apparent shift in strategy. “Profit and free cash flow were not even discussed by management at the time of listing. However, as demonstrated by the core Ebitda profitability that was reported in Q3, we observe a very noticeable shift in management’s strategy for generating profit “added Macquarie. Separately, ahead of Q3 earnings, shares of Zomato climbed 13% in the previous two trading days, rising 9% to Rs 53.90. The company is attempting to increase its profitability, according to management’s most recent statement.
