Zomato, Swiggy, Paytm Stocks Among Samir Arora's Top Picks Amid Current Market Volatility
There will be a 'shortage of very high growth names' in the Indian market in the next six to nine months, says Samir Arora.
Amid the current phase of market volatility, veteran investor Samir Arora is bullish on new-age platform companies, including food delivery aggregators Zomato Ltd. and Swiggy Ltd., along with fintech majors like PB Fintech Ltd., which owns Policybazaar, and One 97 Communications Ltd., the parent of Paytm.
These platforms firms "are doing okay" as they are not reliant on end-growth of consumers, but are relying on the way consumers are buying things, the founder and fund manager at Helios Capital Management told NDTV Profit on Tuesday.
The preference given to online shopping bodes well for the platform companies, he pointed out. Therefore, his key picks amid the current market environment includes Zomato, Swiggy, PB Fintech and Paytm.
"Zomato maybe 6% of our portfolio, with other platform companies being around 2.5–3% of the portfolio," Arora said. Zomato, which dominates India's online food delivery market, has given a five times return "for us and hence, has a higher portfolio composition", he added.
Swiggy, which Arora has mentioned among his top picks, made its stock market debut last week following a Rs 11,327-crore initial public offering. At 2:32 p.m. on Tuesday, it was trading at Rs 419.55 apiece on the NSE, up 1.8% from its post-initial-public-offering listing price of Rs 412 on Nov. 13.
Zomato, which is listed since 2021, has gained immensely over the past year. In the last 12 months, the stock has grown by 130.17%.
PB Fintech has also grown by 110% over the past year, but Paytm is still down 8.5% as compared to the year-ago period. The payments firm's scrip was hammered between February and April following the regulatory action against its banking arm. However, it has shown a significant recovery over the past six months.
According to Arora, there will be a "shortage of very high growth names" in the Indian market in the next six to nine months. This could pose some concern from an investment point of view, as one needs at least 10–20% of the portfolio to be comprised of stocks that grow somewhere between 20% and 30% for at least two–three years, he suggested.
The overall outlook for the Indian market, however, remains positive, Arora said. "There will be more winners and losers, but that does not mean that the market is bad. But, it is not as straightforward as before."
The exit of foreign institutional investors, who have been net sellers for more than a month, may taper off soon, Arora said. "It already appears to be reducing sharply, from Rs 4,000–5,000 crore a day to now less than Rs 2,000 crore a day. I think it will end soon."
