Paytm, Eternal, Lenskart, Nykaa, Honasa: New age stocks gain up to 49% in 3 months; worth a buy?

One97 Communications Ltd, Eternal Ltd, Lenskart Solutions Ltd, FSN E-Commerce Ventures Ltd and Honasa Consumer Ltd are among new age stocks rallying up to 49 per cent in the past three months, riding on strong set of quarter results. Most stocks managed to beat 5-11 per cent returns delivered by midcap and smallcap indices during the same period, but only few offer potential upside, consensus targets compiled from Bloomberg suggested.

One97 Communications Ltd led the rally in new age stocks, surging 49 per cent. During this period, the scrip hit a level of Rs 1,732 on August 26, the highest since its listing day fall on November 18, 2021. For the June quarter, Paytm continued to report strong gross merchandise value (GMV) growth of 31 per cent year-on-year (YoY). Its revenue growth jumped 28 per cent YoY, while Ebitda margin improved to 8 per cent in Q1 from 6 per cent in Q4, mainly due to improving contribution from financial services business and cost rationalisation.

The 12-month Bloomberg consensus target for Paytm at Rs 1,571 suggests a potential 2.6 per cent downside. But recent targets on the stock by YES Securities (Rs 1,700), JM Financial (Rs 1,950)  and Bernstein (Rs 2,200) hinted at potential upside. The scrip stood at Rs 1,617.80 apiece on Wednesday.

Eternal Ltd, erstwhile Zomato, has rallied 32.17 per cent in the past three months. At Rs 326.65 apiece on Wednesday, the scrip is off its 52-week low of Rs 212.55 hit on March 16. This stock is among Axis Securities' top September pick.

"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," Axis Securities said whiel suggesting a target of Rs 390 on the stock.

Eternal's consensus target at Rs 361 impled a 10 per cent potential upside.

Lenskart Solutions Ltd, which saw block deals recently, is up 28 per cent in the past three months. This scrip hit a record high of Rs 674.90 on August 31. This company deliveredconsolidated revenue growth of 43.6 per cent YoY in the June quarter, ahead of analyst estimates, driven by 25.7 per cent YoY growth in volumes. The international business performed also ahead of estimates. Lenskart's 12-month consensus target of Rs 682 suggests upside is capped for the stock.

FSN E-Commerce Ventures Ltd (Nykaa) shares have also gained 28 per cent during the period mentioned, even as at Rs 335.15, the scrip is off its 52-week high of Rs 348.30 hit on August 5. Nykaa’s Q1 revenue, Ebitda and PAT were up 29 per cent, 68 per cent and 226 per cent YoY, respectively. Analysts noted its BPC business was steady, while the Fashion business delivered a standout quarter owing to strong customer growth. Profitability improved further in BPC while fashion business managed to breakeven, they noted.

Nykaa's 12-month target of Rs 347 hinted at 3.6 per cent potential upside.

Honasa Consumer Ltd has  climbed 17 per cent in the past three months. In a recent note, HDFC Securities said Honasa continued to strengthen its execution playbook, now operating with two brands each exceeding Rs 1,000 crore annualized run rate, which provides a strong base for scaling its younger brands more rapidly. Honasa's consensus target at Rs 559 hinted at 18.6 per cent upside.

PB Fintech Ltd (up 9.8 per cent), Delhivery Ltd (5.38 per cent) and Billionbrains Garage Ventures Ltd (2.04 per cent) delivered single digit returns in the past three months.