Ideas for 2023: 2 internet stocks that have potentials to outperform

Their huge exposure to the fast-growing B2B e-commerce space has made brokerage firm ICICI Securities bullish on internet stocks IndiaMart and JustDial.

The domestic brokerage has a ‘buy’ call on IndiaMart InterMersh with a target price of Rs 6,000, which implies an upside potential of 42% from the current market price of Rs 4,237 per share.

It has a ‘buy’ call on Just Dial with a target price of Rs 750, which shows 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 meaningfully over the past one year. On the other hand, strategic investors and private financial 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," said ICICI Securities.

“We have built a proprietary bottom-up model to predict 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 has recently released a report identifying B2B e-commerce as a high-potential growth story over the next 5 years. According to it, the company has estimated that B2B e-commerce could grow GMV 5x over the next 5 years, led by growth in upstream B2B e-commerce.

“This is broadly in line with our report released in October 2022, where we have 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, ICICI Securities said.

The resultant marketplace revenue opportunity is likely to increase to$16.5 billion from $6.8 billion during the same period at a CAGR of 55.4%, it added.

The brokerage firm also expects ONDC to be a creative disruptor in the e-commerce space in India over the medium term. However, ramping up the network to cover different facets of the e-commerce ecosystem is likely to take 2-3 years.

As of now, it believes ONDC is creating a hyperlocal marketplace focused on food delivery and grocery retail.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)