The next multi-bagger may come from digital businesses. “Stocks Like Zomato, Nykaa, PB Fintech, and Paytm may give you 30-40 times in the next five to ten years,” said Dipan Mehta, Director of Elixir Equities.
The role of Zomato, Nykaa, and Paytm in Digital Revolution:
As India is rapidly moving towards a Digital Revolution, the Digital Business is witnessing a sharp rise in the last 5 years. With the increased usage of affordable smartphones and data consumption, Indian businesses can be seen adopting online services in diverse segments.
Recently in an interview with a publication Dipan Mehta, Director of Elixir Equities, said that the next multi-baggers stocks may come from the Digital business. He advised having “small allocations” in concept stocks like Zomato, Nykaa, PB Fintech, and Paytm. He further added that mature businesses like FMCG, petrochemicals, oil, and cement are not going to give the multi-bagger as the concept stocks, which are doing things differently.
The concept stocks are a huge market and they can scale up rapidly at a very low cost. Despite the performance of Paytm, Mehta has kept a close watch on the company’s stock performance. He believes that the way these companies have built up their business models, they may turn out to be great value creators. As of now, he doesn’t have any stocks in these companies, but he said he would invest in these companies in the future, based on their profitability target and revenue source.
He further suggested that “it is best to have a small allocation of 10-15% of your portfolio in these concept stocks and to buy them as a basket, as this will give a higher probability of having a 30-40 multi-bagger in the next five or 10 years.
Earlier the online Interface like UPI (Unified Payment Interface) has reported to saw over 6.57 billion transactions, amounting to 10.72 trillion in August. It is yet another high record up to 4.62 percent and 0.95 percent on a month-on-month (MoM) basis, in terms of volume and value of transactions, respectively.
Newly listed start-up tech companies like them are also focusing on growth with sustainable profits. They recorded solid year-on-year (YOY) revenue growth during the first quarter of the ongoing financial year 2024 (FY23).
Both Zomato and Paytm were among the best-performing stocks touching their upper circuit this week, ending the week 16.3% and 16.1% higher, respectively, on the BSE.
Edelweiss’s Analysts reported that Nykaa had a good performance with gross merchandise value (GMV) up 47% to Rs 2,156 crore. They also gave a green signal for BUY, if the stock doesn’t plummet further and maintains its good performance.
In 2016, the Government of India launched the “Start-up India” initiative to boost entrepreneurship capabilities among Indians. The Government believed that nurturing the young generation, can generate jobs and make the country financially independent. In six years, 72993 start-ups were recognized, which created over 7.6 lakh direct jobs, with a 110 percent yearly increase. Flipkart, BYJU’s, Nykaa, and Swiggy have a valuation of over 10 billion dollars. India has ranked third largest in the start-up ecosystem in the world.
You can see how the amazing results of this project in India in 2022 top 5 most valued start-ups in India
Dipan Mehta also appeared on CNBC TV-18. Upon asking about his opinion on the Banking Stock, he stated that “the banking sectors are taking the leadership, and the best corporate numbers from this quarter and next few quarters are going to come from the banking sectors.” He also said that one can invest in Tier-II or Tier-III banks, but his top picks for the investors’ portfolio are large-cap banks like ICICI bank, followed by Kotak, HDFC, and Axis bank.
