From hitlist to wishlist! New-age tech stocks outpace conventional sectors on Dalal Street
Shares of new-age consumer technology companies have possibly left most conventional sectors behind by making a strong comeback in FY24.
Thanks to the recovery in the technology stocks globally and the consistent improvement in earnings, Dalal Street investors are moving their eyes from the “sell” to the “buy” button.
So far in the current financial year, all the listed new-age consumer tech stocks have given double-digit returns, and stocks like Zomato look set to turn a multibagger soon.
That the faith is coming back in these stocks reflects in the shareholding pattern of institutional investors.
Mutual Funds have increased their holding in Zomato for four quarters in a row. As of June end, their cumulative holding stood at 8.3%, compared to a meagre 2.4% in the same period a year ago.
Similarly in FSN E-Commerce, MFs increased their stake for three consecutive quarters, taking their cumulative holding to 8.5% at the end of June quarter.
In the same quarter last year, they held a mere 1.9% stake in the online beauty products retailer.
In Paytm, mutual funds were holding just 1% in December 2021, but it went up to 2.52% in the June quarter.
Prior to listing, most new-age technology companies enjoyed valuation premium on account of scalability, niche markets and runway for growth.
«But post listing, investors started discounting valuation when the earnings performance was not inline with the potential that was embedded in valuation,» said Vaibhav Shah, fund manager, Torus Oro PMS.
One of the major factors driving investors back into these counters recently is the improvement in their earnings performance.
“Until last year, these stocks were not even in their (investors) radar. But now, they have started looking into them
