New age tech stocks Zomato and Paytm continued to remain under pressure today, hitting their respective lows since listing. Zomato slumped over 18% in Monday’s early deals to ₹92 apiece on the BSE. On the other hand, Paytm shares were trading nearly 4% lower at ₹924 apiece.
The food delivery platform Zomato got listed in July 2021 and is up more than 30% from its IPO issue price of ₹76. Meanwhile, Paytm is down over 57% from its issue price of ₹2,150.
“The trend in global stock markets has turned distinctly bearish. Last week S&P 500 and Nasdaq closed 8% and 15% below their all time highs. The sell-off in tech stocks has been brutal last week. European stocks too turned bearish. An important feature of the tech sell-off is that bulk of the selling is happening in non-profitable tech stocks. This trend is impacting stocks like Zomato and Paytm in India too,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
There is a risk-off situation across the globe amid fear of tightening by the US Fed where the trend shows a sharp sell-off in growth stocks especially loss-making new age companies that came out with unrealistic valuations amid euphoria in the market, as per analysts.
“We know that only a few companies will survive in the long run and I believe Zomato has the potential to perform in the long run. The recent price correction is leading to stock at a reasonable valuation where aggressive investors can use this correction as a buying opportunity with a long-term view,” said Santosh Meena, Head of Research, Swastika Investmart.
“Zomato shares are looking weak on chart pattern and it may go up to ₹75 levels after giving successive breakdowns at ₹110 and ₹100 apiece levels. Those who have this share in their portfolio should exit on bounce while fresh investors are advised to take any buy position at current levels,” advised Sumeet Bagadia, Executive Director at Choice Broking.
Paytm shares have been under pressure since its dismal listing and a spate of bearish views. Its debut, made in November 2021, was one of the worst initial showings by a major technology firm since the dot-com bubble era of the late 1990s.
“Those who hold Paytm shares should exit on bounce and wait for ideal levels to re-enter whereas fresh buyers are advised to take any position at current levels. One can look to Buy either at ₹800 with stop loss ₹677 for 2-year target of ₹1,950 to ₹2,000 or above ₹1,100 maintaining stop loss at ₹915 for same two-year target,” said Ravi Singhal, Vice Chairman, GCL Securities.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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