Mutual funds (MFs) lapped up shares of new-age businesses in April at a time when most of these stocks have recovered sharply from their 52-week lows, a report by Business Standard stated. Quoting a brokerage report, the market daily noted that Nykaa and Zomato were in the list of top 10 most bought shares by MFs last month, with fund houses' holdings in these two stocks rising by over ₹1,100 crore.
The rise in MF weightage comes after the shares of Zomato staged some recovery in April. The stock was trading at around ₹64 at the end of April compared to about ₹50 at the end of March, it informed. The market daily further said that most brokerages have given a 'buy' rating to the stock given the high growth potential of the food-delivery space, the report added.
"We see ONDC as a potential threat to Zomato, only if it meaningfully scales up across categories, allowing it to achieve greater efficiency compared to the walled gardens. At its current scale, we do not have enough evidence to alter our base case for Zomato," a Motilal Oswal report was quoted as saying.
On the other hand, shares of Nykaa continue to remain on a downward trend. The stock has lost almost 65 percent since listing and brokerages have retained 'sell' and 'hold' ratings on the stock due to multiple headwinds, said BS.
Quoting a recent note by HDFC Securities, it highlighted that the rising competition, more cost of acquisition, softening product margins are factors likely to dent Nykaa's prospects. It has set a target price of ₹110 for the stock which last traded at ₹124 on Friday.
However, the report pointed out that some brokerages like JM Financial have maintained a bullish stance on the stock expecting it to double in price in coming quarters on the back of improvement in margins and high revenue growth.
Other than Nykaa and Zomato, the top buys of MFs also included two pharmaceutical stocks — Cipla and the newly-listed Mankind Pharma, informed BS. Also, Infosys drew the highest interest from MFs for the second month in a row, it added.