Robust growth ignites rally in new-age stocks, 45% gains made in 6 months
New-age stocks have made a strong comeback of late driven by robust revenue growth and improved profitability through reduced spending. Increased allocations by overseas funds and strong demand for recent public issues have further fuelled the rally. Analysts believe these stocks could continue to perform well so long as they sustain their growth momentum.
The ET E-commerce Index, comprising 13 new-age companies, has surged 45% in the past six months, outperforming the 12% gain in the Nifty Index and the 8% rise in the Nifty IT Index.
Shares of Zomato, PB Fintech, and One 97 Communications, the parent company of Paytm, have surged between 60% and 70% in six months, while Nykaa's promoter FSN E-Commerce Ventures and CarTrade Tech have gained 23% and 21%, respectively. Ola Electric, which debuted last Friday, has jumped 75% above its issue price.
«Improved capital allocation and inorganic growth have bolstered earnings for new-age companies, sparking a sharp rebound in their share prices over the last 6-12 months,» said Kunal Mehta, associate director at Equirus. «With lower cash burn and more efficient use of funds, these businesses are well-positioned to continue thriving.»
Stocks like Zomato, Paytm, Nykaa and PB Fintech saw significant declines after their listings in 2021 during the post-COVID internet boom, leading to heavy losses for investors. As a result, many companies in this sector delayed their IPO plans. This month, however, three companies — Ola Electric, Brainbees Solutions (the parent company of
