Eternal, Paytm Shine Amid A Bearish Market For New-Age Tech Stocks

Amid negative investor sentiment, the broader Indian equity market saw yet another week of decline. After showing resilience over the last two weeks of bearish market, 21 out of the 35 new-age tech stocks under Inc42’s coverage fell in a range of 0.05% to slightly over 13% this week.

The biggest loser this week was drone tech company ideaForge, with its shares plunging 13.07% to end at INR 472.25. The company’s shares have crashed over 24% year to date (YTD). This week, the stock fell sharply after the company posted yet another quarter of underwhelming financial performance for Q1 FY26 on July 22 (Tuesday). 

The second biggest loser this week was recently listed Smartworks, with its shares falling 9.06% to end the week at INR 416.80. The stock plunged to an all-time low of INR 409.90 during the intraday trade on July 25 (Friday) before recovering by the end of the session. However, the company’s shares have now slipped over 4% below the listing price of INR 436.10.

During the week, Smartworks said that NGO Infrastructure Watchdog has moved the Supreme Court against the Securities Appellate Tribunal’s (SAT) order dismissing the latter’s plea to stay the coworking company’s IPO.

Smartworks’ competitor Awfis also saw its shares fall 6.36% to end the week at INR 607.

Meanwhile, IndiQube, another major player in the real estate tech space, closed its IPO with an overwhelming investor interest. The managed workspace providers’ public issue ended with an oversubscription of 12.4X, with investors bidding for 21.2 Cr shares as against 1.71 Cr shares on offer. The shares of the company are expected to list on the bourses on July 30 (Wednesday). 

Amid all these, 13 new-age tech companies ended the week in the green. Eternal and Paytm gained the most after they disclosed their Q1 numbers.

Eternal’s rival Swiggy also saw a spike in investor interest this week. Its shares rose 4.93% to end the week at INR 407.80.

The shares are now trading 1% below their listing price of INR 412 on the BSE. Swiggy is set to disclose its financial numbers next week on July 31 (Thursday). 

The next week will also see CarTrade, PB Fintech, Fino Payments Bank, MobiKwik and Delhivery report their financial numbers for the first quarter of FY26. These companies, barring MobiKwik and Fino, saw an uptick in their shares this week. 

Given that a majority of larger new-age tech companies ended the week in the green, the cumulative market cap of the 35 new-age tech companies saw a small dip and stood at $91.3 Bn as against $91.9 Bn at the end of last week.

New-Age Tech IPOs Boom Amid A Bearish Market

The broader Indian equity market ended lower for the fourth straight week as investor sentiment continued to remain weak. While Sensex declined 0.4% to 81,463.09, Nifty 50 slipped 0.5% to 24,837. The benchmark indices showed some resilience in the first three sessions of the week, but the bears took control in the last two sessions. 

Just like the past week, investor interest was primarily driven by financial performances of the companies. Besides the earnings, investor interest was also governed by multiple global events. 

“The finalisation of the US-Japan and India-UK trade agreements marks a key step in easing global trade barriers. A resolution of the US-India mini trade deal by August 1 could further allay investor concerns. On the domestic front, the expectation for further rate cuts is also rising on the back of a benign inflationary trend, which will stimulate growth,” said Vinod Nair, head of research at Geojit Investments. 

Moving forward, the next week is expected to be packed with key economic events across the US, India, and China, which could significantly influence global market sentiment. Investors will keep a close eye on  the Federal Reserve’s FOMC rate decision scheduled for July 30 (Wednesday). 

“Together, these global economic indicators will be closely monitored by investors and policymakers alike, as they could provide crucial cues on growth momentum, inflation trends, and potential shifts in monetary policy across major economies,” Bajaj Broking Research said in a note. 

Despite the bearish market in the domestic equity market, a number of new-age tech companies are gearing up for their public listings. While shares of IndiQube will list next week, edtech major PhysicsWallah (PW) got SEBI nod this week to proceed with its public issue. 

Meanwhile, SaaS major Amagi, which turned unicorn in 2022, filed its DRHP for an IPO which will comprise a fresh issue of up to INR 1,020 Cr and an OFS of up to 3.41 Cr shares. 

Snapdeal parent AceVector, too, filed its DRHP via the confidential route for an INR 500 Cr IPO this week. 

Now, let’s take a look at the performance of Paytm and Eternal on the bourses this week. 

Blinkit Growth Drives Eternal Shares Higher 

After it reported its Q1 numbers on Monday, shares of Eternal shot up throughout the week. After touching a fresh 52-week high of INR 314.4 on Thursday, the stock closed 20.7% higher week-on-week at INR 310.60 on Friday. 

The net profit of the Zomato parent slid over 90% YoY to INR 25 Cr in the June quarter as the company continued to make investments in its quick commerce vertical Blinkit. However, its operating revenue zoomed over 70% to INR 7,167 Cr in Q1 FY26. 

The growth of Blinkit stood out during the quarter. Its loss stood at INR 42 Cr, a decline of about 50% from INR 82 Cr in the previous quarter. The quick commerce arm’s operating revenue for the quarter stood at INR 2,400 Cr, recording an over 2.5X growth from INR 942 Cr in Q1 FY25.

Brokerage Motilal Oswal expects the company’s margins to improve moving forward despite aggressive expansion. Further, it also expects the quick commerce arm’s inventory-led model to lift margins by 100 basis points. 

“Eternal’s food delivery business is stable, and Blinkit offers a generational opportunity to participate in the disruption of industries such as retail, grocery, and ecommerce,” the brokerage said. 

It ascribed a ‘Buy’ rating to the company’s shares and a price target of INR 330. 

Paytm Turns Profitable

As per its previous guidance, fintech major Paytm reported a net profit of INR 122.5 Cr in Q1 FY26. After the company reported its numbers on Tuesday, the stock surged to a fresh 52-week high of INR 1,128 on Thursday. The shares settled at INR 1,067.40 at the end of the week, zooming 6.75% from last week. 

Paytm’s revenue from operations grew 28% YoY to INR 1,918 Cr during the quarter under review from INR 1,502 Cr in Q1 FY25. It attributed the profitability to “AI-led operating leverage, disciplined cost structure” and higher other income.

Paytm said the improvement in contribution margin and profit came on the back of increase in net payment revenue, higher share of revenue from distribution of financial services, and reduction in direct expenses.

On the back of the strong results, brokerage firm Jefferies upgraded Paytm to ‘buy’ from ‘hold’ and raised its price target to INR 1,250 per share from INR 900 before.

In its note, Jefferies projected that Paytm’s EBITDA margin could improve from -22% in FY25 to +9% in FY27 and 14% in FY28, reflecting a significant turnaround in profitability.

“We raise EBITDA estimates for FY26-28, led by tad higher contribution margins/operating leverage. Upgrade to FY26 looks steeper due to some transitionary benefits, and upgrades to FY27-28 EBITDA are around 14-17%,” the brokerage added.