5 hrs ago
New-Age Indian Stocks Rally, But Analysts See Uneven Upside
Several newer Indian companies have seen their share prices rise over the past three months.
Paytm, Eternal, Lenskart, Nykaa and Honasa were among the stronger performers.
However, analysts do not all see the same amount of future growth.
Paytm’s average target suggests a small fall, although some brokerages have set higher targets.
Eternal received a Buy rating from Axis Securities because it is becoming profitable in important business areas.
Lenskart’s sales grew faster than analysts expected, but its average target leaves little additional upside.
Nykaa reported strong growth in sales and profits, especially in its fashion business.
Honasa is expanding brands that already have large annualized sales.
Investors therefore need to weigh recent gains against each company’s expected future performance.
Paytm gained strongly, but its Bloomberg consensus target implies 2.6% downside from Wednesday’s price.
Eternal rose 32.17% in three months, with Axis Securities maintaining a Buy rating and setting a Rs 390 target.
Lenskart climbed 28% and reported 43.6% year-on-year revenue growth in the June quarter.
Nykaa gained 28%, while its first-quarter revenue, Ebitda and PAT increased 29%, 68% and 226%, respectively.
Honasa rose 17% and had an 18.6% potential upside based on its Rs 559 consensus target; other listed stocks posted smaller gains.
- Who
- Paytm, Eternal, Lenskart Solutions, Nykaa, Honasa Consumer and several other new-age listed companies, along with analysts and brokerages covering them.
- What
- The stocks posted gains over three months, but their analyst targets indicate widely differing expectations for further upside or downside.
- Where
- When
- The performance period was the past three months; prices and targets were discussed in recent analyst reports and on Wednesday.
- Why
- Analysts cited factors including improving profitability, revenue and volume growth, stronger execution, brand expansion and better business performance.
Bullish View
Cautious View
Recent share-price momentum
Bullish View
Paytm, Eternal, Lenskart, Nykaa and Honasa have all delivered gains over the past three months, showing strong recent momentum.
Cautious View
Past gains do not guarantee further increases, and some stocks are already near or above levels reflected in consensus targets.
Paytm’s future valuation
Bullish View
YES Securities, JM Financial and Bernstein issued targets above Paytm’s Wednesday price, suggesting potential upside.
Cautious View
The Bloomberg 12-month consensus target of Rs 1,571 implies a 2.6% downside from Paytm’s Wednesday price.
Remaining upside
Bullish View
Eternal’s consensus target implies 10% upside, while Honasa’s target implies 18.6% upside; Eternal also received a Buy rating from Axis Securities.
Cautious View
Lenskart’s consensus target suggests limited upside, while Nykaa’s target implies only 3.6% potential upside.
Key facts
- Paytm price
- Rs 1,617.80 on Wednesday
- Eternal three-month gain
- 32.17%
- Lenskart three-month gain
- 28%
- Lenskart June-quarter revenue growth
- 43.6% year-on-year
- Nykaa three-month gain
- 28%
- Nykaa first-quarter profit growth
- PAT increased 226% year-on-year
- Honasa consensus target
- Rs 559, implying 18.6% potential upside
Quotes
Axis Securities
Brokerage and financial research firm covering Eternal Ltd
“Based on SOTP Valuation, we maintain our Buy rating on the stock, driven by the company’s transition to adj. Ebitda positive in key verticals, strong scalability potential, and continued expansion into adjacent consumption categories.”
businesstoday.in








