Zomato, Delhivery, PB Fintech among MF’s top buys in November; turn the tables?

After the carnage that most stocks in the emerging technology space have witnessed in 2022, there appears to be some light at the end of the tunnel for them, if the portfolio rejection by major mutual funds in November is any indicator. , Delhivery, , and FSN E-Commerce were among the stocks that made it to the “top buy” list of some mutual funds.

Aditya Birla Sunlife Mutual Fund added Nykaa parent FSN E-trading shares worth Rs 270 crore during the month, according to Nuvama Wealth Management.

Axis Mutual Fund’s prominent additions included Zomato worth Rs 227 crore, while Franklin Templeton Mutual Fund added Delhivery and PB Fintech to its portfolio by buying shares worth Rs 126 crore and Rs 123 crore, respectively.

In November, stocks such as Delhivery, PB Fintech and FSN E-Commerce witnessed selling by existing shareholders who opted for a partial exit after the expiry of the 1-year bond

period, due to significant erosion in the value of their investments in these companies.

While Tiger Global offloaded a little over 4% stake in PB Fintech, TPG Capital and Lighthouse India fund sold partial stakes in FSN E-Commerce. American private equity major Carlyle

The group sold 2.5% stake in Delhivery.

Are the tables turning for businesses?

Most market experts believe that the overhang of selling existing shareholders is still too much for many of the companies, and they are therefore not comfortable buying them.

“We are comfortable owning businesses where we could see a reasonable path to profitability and make sense from a capital efficiency point of view. This has led us to avoid investing in some of the new companies,” says Vinit Sambre, head of equities at DSP Mutual Fund .

But not all stocks in this range are a no-no for money managers.

The sharp improvement in the economy and the acquisition of Blinkit has turned the tables for Zomato.

“We believe Zomato is a perfect play on a new age technology company and growing consumerism in India. The company is a disruptor in the food industry, even as it offers a ‘win-win-win’ solution,” said Sachin Shah, fund manager at Emkay Investment Managers .

Delhivery is another stock that some analysts are bullish on given the strong growth prospects for the logistics sector.

Global investment bank Morgan Stanley recently upgraded its rating on Delhivery to “overweight”, citing favorable risk-reward ratios.

The bank believes that once Delhivery’s profitability normalizes and growth possibly returns in FY24, the valuation multiples have room to reassess.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)