stock ideas for 2023: Ideas for 2023: 2 internet stocks that have potentials to outperform
The domestic brokerage has a ‘buy’ call on IndiaMart InterMersh with a target price of Rs 6,000, implying an upside potential of 42% from the current market price of Rs 4,237 per share.
It has a ‘buy’ call
with a target price of Rs 750, showing an upside potential of 23% from the current market price of Rs 577 per share.
“IndiaMART and Just Dial, the two listed stocks in the space, have corrected significantly in the last one year. On the other hand, strategic investors and private finance investors have turned bullish on the space. In our view, this divergence is unlikely to last longer .We expect both IndiaMart and JustDial to outperform broader markets over the next year, given their large exposure to the fast-growing B2B e-commerce space,” ICICI Securities said.
“We have built a proprietary bottom-up model to forecast the growth of e-B2B space across different sub-segments. We estimate penetration-led growth in the segment as digital penetration of B2B space is expected to increase to 2.3% in FY25E from 1.2% in FY23E,” it said.
According to media reports, one of the top global consulting houses recently released a report identifying B2B e-commerce as a high-potential growth story over the next 5 years. Accordingly, the company estimated that B2B e-commerce GMV could grow 5x over the next 5 years, led by growth in upstream B2B e-commerce.
“This is largely in line with our report released in October 2022, where we used a proprietary model to estimate growth in the B2B e-commerce segment. Our model estimates penetration-led growth in the segment as digital penetration of B2B space increases to 2.3% in FY25E from 1.2% in FY23E, said.
The resulting market revenue opportunity is likely to increase to $16.5 billion from $6.8 billion during the same period at a CAGR of 55.4%, he added.
The brokerage also expects ONDC to be a creative disruptor in the e-commerce space in India in the medium term. However, expanding the network to cover different facets of the e-commerce ecosystem is likely to take 2-3 years.
As of now, he believes ONDC is creating a hyperlocal market focused on food delivery and grocery retail.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. They do not represent the views of Economic Times)