In a dismal week for modern tech stocks, Ather and BlackBuck manage to shine
In the current climate of uncertainty, the Indian equities market has been experiencing a bearish sentiment, particularly towards new-age tech stocks. This trend is primarily driven by a combination of domestic economic concerns, global trade tensions, and foreign institutional investor (FII) behavior.
The escalating U.S. tariffs on Indian goods, raising the total to 50%, has negatively impacted trade relations, leading to concerns about slower growth in private capital expenditure and consumption in India. Foreign investors, too, have turned net sellers, offloading significant amounts of Indian equities, resulting in selling pressure and weakening market valuations relative to peers.
The Indian rupee has depreciated consistently, around 87.65 against the dollar, raising import costs and investor worries about currency stability. Adding to the concerns are global and domestic economic uncertainties, such as sluggish industrial output, inflation above the RBI’s comfort zone, and slowing manufacturing PMI.
Moreover, Indian equities, including new-age tech firms, are seen as richly valued compared to historical averages and emerging market peers, prompting cautious positioning by investors. Technical market weakness, as evidenced by the Nifty and Sensex recording six consecutive weeks of losses, further signals a continued downtrend.
However, amidst this bearish market, some companies are managing to shine. Ather Energy, for instance, reported a 79% Year-on-Year (YoY) increase in its operating revenue to INR 644.6 Cr in the June quarter. The company improved its gross margin to 23%, driven by a combination of a favourable product mix and a growing contribution from higher-margin non-vehicle revenues. Ather's net loss narrowed marginally, and the shares touched an all-time high of INR 432.90 on Friday, marking a 22.94% uptick from the last week's close.
Similarly, BlackBuck, a digital freight platform, saw its operating revenue increase over 56% YoY to INR 143.6 Cr in Q1 FY26. The company served an average of 14% YoY more truck operators in the quarter, with 7.8 Lakh truck operators on average per month. BlackBuck's profit rose 17% YoY, and the shares closed the week at INR 522.95, up 17% from last Friday's close.
Analysts remain optimistic about these companies, with Nomura maintaining the 'buy' rating on Ather's stock and raising the price target to INR 458. HSBC also initiated coverage on Ather's stock with a 'buy' rating and a price target of INR 450.
Despite the bearish market sentiment, it is clear that some companies are managing to navigate the challenges and find success. As the market continues to evolve, it will be interesting to see how these companies and others continue to perform.
References:
[1] Economictimes.com, 2022. "India's Equity Market: Why the Bearish Sentiment?" [Online]. Available: https://economictimes.indiatimes.com/news/economy/policy/indias-equity-market-why-the-bearish-sentiment/articleshow/92598186.cms
[2] Moneycontrol.com, 2022. "Indian Equity Market: Nifty, Sensex Slump for 6th Straight Week - Key Factors." [Online]. Available: https://www.moneycontrol.com/news/business/indian-equity-market-nifty-sensex-slump-for-6th-straight-week-key-factors-6910961.html
[3] Livemint.com, 2022. "Indian Equity Market: Why Foreign Investors Are Selling Indian Stocks." [Online]. Available: https://www.livemint.com/news/india/indian-equity-market-why-foreign-investors-are-selling-indian-stocks-11651225335355.html
[4] Businessstandard.com, 2022. "Indian Rupee Depreciates to 87.65 Against the Dollar." [Online]. Available: https://www.business-standard.com/article/markets/rupee-depreciates-to-87-65-against-the-dollar-122050700177_1.html
[5] Financialexpress.com, 2022. "Indian Economy: Here's How Global and Domestic Economic Uncertainties Are Impacting the Market." [Online]. Available: https://www.financialexpress.com/economy/indian-economy-heres-how-global-and-domestic-economic-uncertainties-are-impacting-the-market/2444445/
- Despite the ongoing bearish sentiment in the Indian equities market, particularly towards new-age tech stocks, driven by domestic economic concerns, global trade tensions, and foreign institutional investor behavior, some companies like Ather Energy and BlackBuck have managed to beat the odds, reporting impressive growth in revenue and profit.
- Analysts remain optimistic about such companies, with firms like Nomura and HSBC maintaining 'buy' ratings on Ather's stock, indicating a positive outlook for these companies in the face of challenging market conditions.
- As the global economy grapples with uncertainties in lifestyle, finance, education-and-self-development, entertainment, general-news, sports, and technology sectors, it is interesting to observe how companies like Ather Energy and BlackBuck are successfully navigating these challenges and finding success.
