E-commerce sector is buzzing: Vinay Khattar, Edelweiss Financial Services Limited

In a chat with ET Now, Vinay Khattar, Head Research (Individual Clients), Edelweiss Financial Services Limited, shares his views on the e-commerce sector. Excerpts:

ET Now: Just a quick perspective on Info Edge because either ways, Just Dial, Info Edge have benefitted from this order for scarcity premium that the market is giving them on account of there not being many listed entities from the space.

Vinay Khattar: Yes probably true but far more in terms of valuation, if you actually look at these companies, the top line numbers for number of these companies on the e-retailing side or e-commerce side is very good but very little translates to the bottom line side.

So this does not necessarily mean that all the companies would fall into this bracket. But bottom line performance and profitability and what kind of PE multiple that these stocks end up trading is going to be relevant. Amazon indicated that they have had more than a billion dollar of sales already in their first year of operation in India.

We have had similar comments on very aggressive growth in on-line businesses from Snapdeal and Flipkart. The entire e-commerce space is buzzing at this particular point in time, valuations have been sky high and unlisted entities are rushing to raise in whatever capital they can while the times are good.