New-age companies like Zomato, Paytm and Delhivery are going to witness a lot of value creation based on their entry point into the markets and sustenance amid the ongoing funding winter, said chief investment officer of ValueQuest Investment Advisors Ravi Dharamshi.
"It's not about this quarter's profitability. But can that model sustain itself? Can they fund their own expansion through their own cash flows? If that is the case, then I think these are strong business models, especially the food delivery one, because there are literally only two players. So I would be positively inclined," he said in a conversation with CNBC TV18.
On August 7, shares of Paytm soared more than 10 percent after founder Vijay Shekhar Sharma announced to purchase a 10.3 percent stake in Paytm from Antfin. The transaction will make Sharma and the promoter entities the largest shareholder in the fintech major.
On August 3, Zomato posted a net profit of Rs 2 crore in the first quarter of FY24 and reported revenues of Rs 2,416 crore, up 70.9 percent from the year-ago period, as demand growth recovered on cooling inflation and strength of the food delivery platform’s loyalty programme.
In reaction, Zomato's shares crossed the Rs 100 mark in early trade on August 7 after rallying for the last five consecutive sessions on the National Stock Exchange.
Moreover, Delhivery's net loss shrank to Rs 89 crore in Q1FY24 on lower freight and servicing costs.
Dharamshi believes the market may see a 5 to 7 percent correction but its upward trajectory is expected to sustain. "We will find our reasons to have a shakeout to have a correction ... the spike in US bond yields or RBI decision coming up can provide reason that the market is looking for some consolidation correction," he said.
He also believes the market uptrend is solidly intact and in the second half of the year, markets will witness a lot more activity on the IPO front. "I feel confident that markets trajectory will sustain with a step back at, at best," he said.
Talking about the auto space, Dharamshi said the auto cycle has been on a revival with various segments of the auto sector being in different stages. Ahead of new launches lined up and the government expected to come up with new regulations, the space is still evolving, he said.
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