Structurally over the next 3-5 years, new age tech companies a good theme: Pratik Gupta

economictimes.indiatimes.com:

Pratik Gupta, CEO & Co-Head, Kotak Institutional Equities, says what the market is liking is the fact that new age tech companies are turning profitable or staying profitable in some cases and the profit margins, EBITDA margins, contribution margins are improving. So that's actually a positive. We think structurally over the next three to five years, this is a good theme. In a couple of cases, unfortunately, these stocks have gone up very sharply. So there could be a near-term pause, but by and large, we are quite constructive on most of the new age companies, the listed ones.”

The best could be behind at least for the near term in spaces like defence and railways, which did get pretty frothy about two months back.
Yes, I would agree. I think you have got to be a bit careful in those spaces. The stocks have had a very nice run up. They are extrapolating whatever has happened in the last one or two quarters. And that I think is a bit dangerous.

Unlock Leadership Excellence with a Range of CXO Courses

How are you playing the entire premiumisation theme? Even the new age tech companies like Zomato are showing signs of reversal, and decent numbers from Nykaa as well. Would you now look at these companies also positively?
Yes, we have been positive on some of these stocks. And frankly, one of the concerns in the past was capital allocation and the cash burn that was out there. And after the sharp correction in stock prices, late last year, early this year, et cetera, in many of these stocks, partly triggered by a wave of pre-IPO