The difficulties of new generation technological enterprises are endless. They’re back in the limelight following a mixed showing in the fourth quarter.
Paytm and PB Fintech have not only posted higher-than-expected earnings, but have also dramatically reduced their losses. Zomato and Nykaa’s financials did not improve overall, but experts remain hopeful.
Another new age firm in the news is Dunzo, a hyperlocal delivery startup with high losses and a big value. In a tweet on February 15, billionaire and RPG Group chairwoman emphasised the company’s financials.
“New generation digital equities are underperforming simply because the market is underperforming. India has underperformed this year, with a negative 2.34% YTD return, whereas economies such as China, Hong Kong, and South Korea have done quite well.
When India’s underperformance improves, new era digital enterprises will follow suit. Some of the outcomes from this area are really impressive, such as Paytm. Zomato has also performed well, while Nykaa’s earnings fell short of expectations,” said Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services.
New generation technology businesses have been scrutinised owing to substantial underperformance in their share prices as a result of inflated valuation. Despite various barriers, experts feel that the long-term gamble on these firms is worthwhile.
This rise is even more noteworthy in light of the traditionally bad third quarter for insurance, where new business premiums for life and general insurance fell by 19% and 12%, respectively.
So,new-age internet-based enterprises, like its unlisted counterparts, have been devising strategies that would take them to profitability and are already on a growth path supported by their distinct business propositions, assuaging investor and analyst fears.