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Delhivery, Nazara Tech among top internet stocks picks ahead of earnings season. Buy, sell or add?


Q3 (October-December) of FY23 was a tough quarter for most B2C e-commerce companies and investors were expecting a recovery in Q4 of FY23. However, domestic brokerage and research firm ICICI Securities said B2C growth may beat expectations.

The brokerage notes that there are signs of consumption fatigue in online food ordering and BPC e-commerce. This is in stark contrast to the boom in some offline discretionary categories such as travel and hospitality.

ICICI Securities believes that this is due to wallet share recalibration among different consumption baskets and the continued trend of online-to-offline migration that first took place in Q2 FY23.

The note said, “In our view, B2B e-commerce is likely to continue on a strong growth trajectory in Q4FY23E, as penetration increases as small businesses look to increase their digital footprint on both the supply and demand sides.” Looking for means.”

Based on research, analysts at ICICI Securities have listed four new-age tech stocks as their top picks: Delhivery, IndiaMart, JustDial and Nazara Technologies.

ICICI Securities overall stock pick –

Indiamart Intermesh (Buy), target price 6,000

Just Dial (Buy), target price 750

Delhivery (Buy), target price 425

Zomato (Buy), target price 65

Matrimony (Hold), target price 575

Najara (Buy), target price 700

Nykaa (ADD), target price 165

What to expect from Q4FY23 results –

zomato: The brokerage estimates adjusted revenue growth of 9.5% QoQ and 68% YoY in Q4FY23E and flat consolidated EBITDA QoQ, indicating continued growth in new businesses.

heroine: The fourth quarter has historically been a weak one for Nykaa. Q4FY23E also experienced online consumption fatigue. Overall, the brokerage estimates a revenue growth of 31.3% YoY in Q4FY23. It added that cost control measures could help EBITDA margin expand by 120bps YoY (flat QoQ). The brokerage estimates EBITDA to grow 73% YoY and PAT to grow 4% YoY.

Delhi: The brokerage estimates Delhivery’s revenue to grow 5.8% QoQ (-6.8% YoY) in Q4FY23E. It added that Delhivery is likely to deliver positive adjusted EBITDA in Q4FY23 for the first time since listing. According to the brokerage, this could be a positive trigger for the stock.

view: The brokerage expects EBITDA margin to decline to 5.2% in Q4 FY2023 (a historically weak margin quarter), compared to 9.7% in Q3 FY2023, and overall EBITDA to be flat year-on-year Will remain

Indiamart: The brokerage estimates EBITDA margin to decline by 280bps QoQ (-330bps YoY) in Q4FY23E due to one-off other expenses. Overall, it said EBITDA is likely to be flat at 14.7% YoY and PAT in Q4FY23.

just Dial: The brokerage believes that Just Dial’s B2B revenue will likely rise rapidly in Q4 FY2023, rising 10.1% QoQ and 63.7% YoY. EBITDA edge is probably going to stay stable consecutively at 12.3%, however with an improvement of 16pps YoY. “We gauge EBITDA to become 6% consecutively to Rs312mn in Q4FY23E, as against a deficiency of Rs8mn in Q4FY22,” it said.

The opinions and suggestions presented above are those of individual analysts or brokerage firms and not those of o2help.


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