Stocks news, Are Nykaa, Paytm, and Zomato stocks still worthwhile after Q1 results?

Following the release of new-age tech companies' better-than-anticipated June quarter (Q1FY23) results, analysts predicted a protracted period of recovery for both their operations and stock prices.

Additionally, brokerages disagree as to whether or not it is a good idea to hold these stocks.

Zomato, however, is the stock that is recommended for purchase by the majority of brokerages, with a one-year target price range between Rs 60 and 115, or an increase of approximately 9 to 109 percent from present levels.

The company's gross order value (GOV) for food delivery increased by 10% quarter over quarter and by 42% year over year in Q1, mostly due to a rise in volume and a modest increase in average order value (AOV) of 1-2%. On an adjusted Ebitda basis, the business was likewise profitable throughout the quarter.

"We'll be on the lookout for comments regarding the demand outlook for FY23–24, additional details regarding the road to profitability, and opinions regarding the timing of acquisitions and the consolidation of Blinkit. We think the growth drivers are still solid and that QoQ losses are still dropping, which is good "In its post-result note, UBS stated.

Analysts at CLSA and JM Financial, on the other hand, continue to rate Paytm as a "Sell," with targets of Rs 650 and Rs 525, respectively, as they believe growth is still some time off and there are negative risks.

While maintaining a "Buy" rating on Nykaa, Jefferies has reduced its projections for net profit and Ebitda as a result of increased Q1 costs.

"Based on reduced margin assumptions and larger investments in new businesses, we lower our FY2023–25 Ebitda expectations.

"For FY2023–25, this results in a 10–25% EPS reduction and a revised fair value of Rs. 1,770 (from Rs. 1,835 previously)," Kotak Institutional Equities stated on Nykaa.

Zomato has decreased 3.5% on the stock exchange during the last three months, while Nykaa has decreased 2%. On the other hand, Paytm has increased by 41% throughout this time.

In contrast, according to BSE data, the Sensex rose 7%.

"Paytm's growth trajectory was maintained as its gross merchandise value (GMV) increased 14% QoQ to Rs 3 trillion.

"Its gross take rate decreased by 4 basis points every quarter rationalization just-ended to 36 basis points (bps).

"We think that the reason for this was a larger UPI share and a revenue hit of Rs 27 crore from the rationalization of underperforming merchants.

According to CLSA, "We raise our FY23/24 net take rate expectations by 1bp to 13/14bps."

Comparatively to the Rs 761-crore loss in Q4FY22, Paytm's consolidated loss decreased to Rs 644.4 crore in the first quarter of FY23.

During the just-ended quarter, the combined revenue was Rs 1,680 crore.

According to analysts at JM Financial, Nykaa's Q1FY23 quarterly and annual GMV increase of 20% and 47%, respectively, indicates that the company has a customer base with a greater disposable income and that macro environments like inflation threats don't easily disrupt it.

Consolidated GMV increased by 18%, 21%, and 51% sequentially in the BPC (beauty and personal care), fashion, and other categories during the quarter under review, contributing to a total of Rs 2,490 crore.

In the current economic context, these results are very impressive.

They stated, "We would have preferred a stronger increase in the fashion industry given it is on a tiny basis in a wider market with 16% digital penetration.

Given that Nykaa's Q1 results exceeded expectations, global stockbroker Morgan Stanley has given the company an "Overweight" rating.

Good top-line growth in the BPC and Fashion categories, as well as stable margin in the Fashion segment, were cited as key positives.

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