Top 5 Internet Stocks in India
Today, people depend more than ever on Internet connections, whether for our daily work, our studies, our shopping or even to attend weddings.
The number of active Internet users in India is expected to increase by 45% over the next four years and reach 900m by 2025 from around 622m in 2020, according to the IAMAI-Kantar ICUBE 2020 report. The report defines an active user as someone who has accessed the internet at least once in the past month.
The Internet ecosystem will have to evolve to meet the specific needs of this emerging demography.
And the main Indian Internet stocks will be in the lead, in the lead.
Here is the list of 5 actions that will help boost India’s internet economy.
1. Information board
With a portfolio of brands, Info Edge is India’s leader in online classifieds. It is one of the oldest internet companies in India.
He owns Naukri.com (online recruiting), 99acres.com (online real estate), jeevansathi.com (online marriage) and shiksha.com (online education service).
He also acts as an investor and has invested in many start-ups in the online space and is aggressively expanding his investment portfolio.
The company also became the first institutional investor to back the recently publicly traded Zomato food delivery start-up.
Info Edge has released solid numbers for the first quarter. On a sequential basis, revenue increased 10.2%, primarily driven by recruiting revenue.
The company is witnessing healthy improvement in billing due to improvement in IT and ITeS segment (50-55% of revenue), higher renewals, addition of new customers, higher demand from applicants jobs, better branding and better prices.
That aside, Info Edge has performed well over the past year, delivering a 91% return to its shareholders.
2. Indiamart Intermesh
Indiamart Intermesh is an online marketplace based in India, which connects buyers and suppliers.
The company’s online channel is focused on providing a platform for small and medium enterprises (SMEs), large enterprises as well as individuals.
A large part of the company’s activity comes from SMEs. The platform makes it easy for buyers and suppliers with its offerings that include marketplace, convenient price discovery, smart connection, and easy and secure payments.
The company has 71 million products from 56 different industries listed on its website, making it one of the most diverse markets in the country.
Indiamart Intermesh made a remarkable debut in 2019. Since then, the company’s shares have climbed 799% to reach ??8,744 of the issue price of ??973.
The rally indicates that investors who bought a lot of Indiamart Intermesh at ??14,595 made a profit of more than ??1.3 lakh.
Indian Railway Catering and Tourism Corporation (IRCTC) is a central public sector Mini Ratna (Category-I) company under the Ministry of Railways of the Government of India.
It is active in restaurants and hotels, Internet ticketing, travel and tourism and conditioned drinking water (rail neer).
The IRCTC enjoys a monopoly in the travel assistance services sector. It is the only entity licensed by Indian Railways to provide railroad catering services, online rail tickets, and packaged drinking water in stations and trains in India.
It holds a dominant position in online rail reservations and packaged drinking water with around 73% and 45% market share, respectively.
IRCTC reports turnaround results in June quarter thanks to strong operating revenues.
The IRCTC, when announcing its quarterly results in August, also said its board had approved the proposed 1: 5 stock split or subdivision.
The company has set October 29, 2021 as its registration date for the subdivision of the capital shares of ??10 each in five actions of ??2 each.
Since its inception in the market, shares of the travel assistance services company have risen. It almost turned into a multibagger stock from its IPO issue price of ??320 per share.
Speaking of IRCTC, co-head of research at Equitymaster, Rahul Shah explains if the company’s valuations exceed its fundamentals, in his recent video.
In the video, Rahul discusses whether investors should buy more shares of IRCTC or should they partially exit.
You can watch the video here: IRCTC: buy, hold or sell
4. Simply dial
Justdial is the market leader in the local search engine segment in India.
The company provides local search related services to users across India through multiple platforms, such as internet, mobile internet, as well as telephone (voice) and SMS.
Over the past year, the company’s shares have jumped more than 129%.
The company also launched JD Omni, an end-to-end business management solution for SMBs. It intends to enable thousands of SMEs to effectively manage their online businesses and have a proper online presence through their own website and mobile site.
Apart from that, he also launched JD Pay, for fast digital payments for users and providers. It also launched JD Social, a social sharing platform to deliver curated content to users.
It also aims to make communication between users and businesses transparent through its real-time instant messaging.
Last month, Reliance Retail Ventures took sole control of Just Dial. Reliance retail acquired on July 20, 2021 13.1 million shares of ??10 each of Just Dial for the price of ??1,020 per VSS Mani participation share on the stock exchange through the blocking window.
The acquisition represents 15.63% of the share capital released after the preferential issue of Just Dial. Reliance Retail will be classified as a promoter of Just Dial.
5. CarTrade technology
CarTrade Tech is a multi-channel automotive platform provider with coverage and presence on all types of vehicles and value-added services.
The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto and AutoBiz.
The platform connects new and used automotive customers, vehicle dealers, car manufacturers and other businesses to buy and sell different types of vehicles.
The company derives the majority of its revenue from transaction fees (57% of revenue).
The other key sources of revenue for the business are the media: list subscriptions and advertising revenue from OEMs, dealers and other advertisers; software services: marketplace and software solutions for OEMs, dealers and banks; automobile financing; Assurance; and other value-added services.
Its websites and apps handled around 2.1 million user sessions per day, and the average number of monthly visitors (including apps) was 25.7 million in fiscal year 2021,
The number of vehicles auctioned stands at 814,316 and the number of vehicles sold at auction stands at 156,689 with a conversion rate of 0.8% as in 2021.
It has grown its business significantly, with total revenue increasing at a compound annual growth rate (CAGR) of 45.9% between fiscal 2018 and 2020.
The company has successfully raised ??$ 30 billion through the Initial Public Offering (IPO) and debuted on August 20, 2021.
Since listing, the company has lost nearly 15% compared to its issue price of ??1,618 per share. Currently, CarTrade Tech shares are trading at ??1,374 on BSE.
Apart from these 5 actions, here is a list of other Internet actions to look for.
Things to keep in mind before investing in internet stocks
When it comes to tech stocks or the internet, it’s important to remember that numbers aren’t everything.
After all, there are plenty of examples of top-flight companies that haven’t had a dime in profit to speak of, but have continued to outperform massively – Zomato being one of the most prominent examples.
This is because internet stocks are unique in their ability to grow rapidly and sometimes turn a losing trade into a huge cash cow once they reach critical mass.
Well, one should look for companies that focus on expanding business in India and abroad with excellent technical and business fundamentals, minimal debt and are available at attractive valuations.
(This article is syndicated from Equitymaster.com)
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