3 internet stocks that can rally up to 63%: Yes Securities

 Indiamart has a dominant market share in B2B classified business with around 65 per cent market share in paid listings. The strength of the business model is visible in the 12 per cent CAGR growth in paying subscribers and 31 per cent CAGR growth in the number of registered buyers over 

With the shifting of investor focus from growth at any cost to more profitable growth, share prices of many loss-making platform companies which had their IPOs 8‐9 months ago have seen a major correction. "Also, the concerns regarding a likely slowdown in global GDP growth has led to correction in the valuation of technology stocks worldwide," said Piyush Pandey, Lead Analyst, Yes Securities.

Here are 3 internet stocks that the brokerage recommends buying as the long term story remains intact:

Info Edge

Buy Rs 4,255 | Target: Rs 5,375 | Return Potential +26%

A diversified consumer internet company with a presence in recruitment, real estate, matrimony and education is set to benefit from rising internet adoption in India. Being cash-rich, the company is also looking for acquisitions in allied sectors to drive business synergy. Revenue/ EBITDA/ PAT are expected to grow at a CAGR of 27.4 per cent/36.0 per cent/28.6 per cent over FY22‐FY24E. Yes Securities maintains ‘Buy’ rating on the stock with a target price of Rs 5,375; valued through the SOTP method.

Indiamart

Buy near Rs 4,661 | Target: Rs 5,820 | Return Potential +25%

Indiamart has a dominant market share in B2B classified business with around 65 per cent market share in paid listings. The strength of the business model is visible in the 12 per cent CAGR growth in paying subscribers and 31 per cent CAGR growth in the number of registered buyers over FY17‐22. We expect Revenue/ EBITDA / PAT to grow at CAGR of 26.6 per cent/ 24.1 per cent/ 18.9 per cent over FY22‐FY24E. Yes Securities maintains ‘Buy’ rating with a target price of Rs 5,820, arriving through the DCF method.

Tanla Platform

Buy near Rs 744 | Target: Rs 1,218 | Return Potential +63%

As per industry reports, the Global CPaaS market is expected to grow at a CAGR of 29 per cent from CY20 to CY25E, led by faster adoption of multichannel communication. The adoption of CPaaS-based A2P messaging across industries continues to drive volume growth for both enterprise and platform segments of Tanla. Revenue/ EBITDA/ PAT are expected to grow at CAGR of 21.8 per cent/ 24.9 per cent/ 21.2 per cent over FY22‐FY24E. The brokerage firm maintains a ‘Buy’ rating with a target price of Rs 1,218, valuing it at a PE of 22x on FY24EPS.

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