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


For the majority of B2C e-commerce businesses, the third quarter (October to December) of FY23 was challenging, and investors anticipated a turnaround in Q4 of FY23. ICICI Securities, a domestic brokerage and research firm, cautioned that B2C growth would fall short of projections.

The brokerage observes evidence of consumer fatigue in both BPC e-commerce and online meal ordering. In contrast, several offline discretionary categories, like travel and hospitality, are doing well.

This, according to ICICI Securities, is the result of wallet share recalibration across various consumption baskets and a persistent trend of online-to-offline migration that was initially noticed in Q2 of FY23.

According to the report, “B2B e-commerce is projected to remain on a solid growth trajectory in Q4FY23E, supported by increase in penetration as small businesses explore ways to enhance their digital footprint both on supply and demand sides.”

Based on research, ICICI Securities’ analysts have identified Delhivery, IndiaMart, Just Dial, and Nazara Technologies as their top selections for new-age technology stocks.

IndiaMart InterMesh is ICICI Securities’ top stock pick overall with a target price of $6,000

Simply Dial (BUY), 750 in the target price

Delhivery (BUY), 425 is the target price

Zomato (BUY), 65 is the target price.

Goal Price for Marriage is 575.

Nazara (BUY), 700 is the target price.

Nykaa (ADD), 165 at Target

Results for Q4FY23: What to anticipate – Zomato The brokerage forecasts flattish consolidated EBITDA QoQ and adjusted revenue growth of 9.5% QoQ and 68% YoY in Q4FY23E, demonstrating consistent growth in new companies.

Nykaa: Nykaa has a history of having a weak fourth quarter. Q4FY23E also felt worn out from online consumption. The brokerage predicts that overall revenue will increase by 31.3% YoY in Q4FY23. It claimed that cost-cutting strategies might support a 120 bps YoY increase in EBITDA margin (flat QoQ). The brokerage anticipates a 73% YoY increase in EBITDA and a 4% YoY increase in PAT.

Delhivery: According to the brokerage, the company’s revenue will increase 5.8% QoQ (-6.8% YoY) in Q4FY23E. For the first time since listing, Delhivery is anticipated to produce positive adjusted EBITDA in Q4FY23, according to the report. According to the brokerage, this can be a good trigger for the stock.

Nazara: The brokerage expects total EBITDA to stay flat YoY and EBITDA margin to fall to 5.2% in Q4FY23E (a historically bad margin quarter) from 9.7% in Q3FY23.

IndiaMART: According to the brokerage, Q4FY23E’s hefty other expenses could cause the EBITDA margin to drop by 280 bps QoQ (-330 bps YoY). Overall, it predicted that in Q4 FY23, PAT would remain stable and EBITDA would increase by 14.7% YoY.

Just Dial: According to the brokerage, B2B income from Just Dial is anticipated to increase more quickly during Q4FY23E (10.1% QoQ, 63.7% YoY). Although it has increased by 16pps year over year, the EBITDA margin is expected to stay constant sequentially at 12.3%. According to the statement, “We project EBITDA to increase by 6% sequentially to Rs312mn in Q4FY23E vs. a loss of Rs8mn in Q4FY22.”

The opinions and suggestions listed above are not Currency Veda’s rather, they represent the opinions of certain analysts or brokerage firms.