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<keyword id="19898109" type="General" weightage="100" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>'s parent company, <keyword id="20253123" type="General" weightage="20" keywordseo="One97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One97 Communications" meta.hostid="261" meta.entityid="One97 Communications">One97 Communications</keyword>, declared its Q2FY25 results today, announcing a one-time, exceptional profit of Rs 1,345 crore during the quarter, thanks to the sale of its entertainment ticketing business. The company's PAT (profit after tax) stood at Rs 930 crore. Notably, without this windfall gain, Paytm's finances would still be in red, with the company racking up losses worth Rs 415 crore. Paytm was in red in the year-ago period as well, incurring losses worth Rs 290.5 crore. This windfall profit also improved Paytm's EBITDA by Rs 388 crore on a QoQ basis. The company's revenue also saw a slight uptick of 10.5% quarterly to Rs 1,659 crore, as opposed to Rs 1,501 crore in the previous quarter. But on a year-on-year basis, Paytm's revenue dipped significantly by 34%. The company also announced that it has entered into a DLG (<keyword id="23641220" type="General" weightage="20" keywordseo="Default-Loss-Guarantee" source="keywords">default loss guarantee</keyword>) model for its merchant loans of about Rs 225 crore with SMFG India Credit. Under this arrangement, Paytm will be first in line to take a hit in case of a loss that emerges from borrowers defaulting or skipping their payments. "Following the regulatory framework and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the default loss. The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution,” said the company in its earnings release today. The company's revenue from its payment business also inched up 9% on a quarterly basis, along with its revenue from <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, which also grew by 34% QoQ. At present, Paytm's total merchant subscriptions stand at 1.12 crore, with the company garnering 3 lakh new merchants during the quarter. During the previous quarter, Paytm's <keyword id="20253122" type="General" weightage="20" keywordseo="gross-merchandise-value" source="keywords">gross merchandise value</keyword> (GMV) also inched up by 5% on a sequential basis, which experts anticipate will continue in the coming quarters, just as India braces for the festive season. Per its release, Paytm aims to achieve <keyword id="23641219" type="General" weightage="20" keywordseo="EBITDA-profitability" source="keywords">EBITDA profitability</keyword> (before ESOPs) by the fourth quarter of this financial year. However, investors remained unimpressed with Paytm's performance, with its share slipping by around 3.96% during the day to trade at Rs 697.20. The stock has a YTD (yield-to-date) of 7.91% during the year.

Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

India’s electric vehicle (EV) sector, often seen as a key player in the country’s clean energy transition, has been called “irrelevant” without government <keyword id="20231384" type="General" weightage="20" keywordseo="incentives" source="keywords">incentives</keyword> by a recent Bernstein research report. The report highlights the serious challenges automakers face in achieving profitability and scaling operations in the EV segment, which remains heavily reliant on financial support from the government. <h2>Struggling to achieve profitability</h2>The Bernstein report reveals that generating profitable margins in the Indian EV sector is proving to be an uphill battle for automakers. “It is tough to generate sufficient margins and get scale in EVs. Even with hefty incentives, incumbent OEMs are still unprofitable,” the report stated. This underscores the fact that even with <keyword id="20022183" type="General" weightage="20" keywordseo="government-subsidies" source="keywords">government subsidies</keyword> aimed at promoting <keyword id="20138204" type="General" weightage="20" keywordseo="electric-mobility" source="keywords">electric mobility</keyword>, automakers are struggling to make EVs financially viable. High production costs, limited infrastructure, and relatively low consumer demand all contribute to this issue. Traditional automakers, particularly in India’s two-wheeler market, are facing significant financial losses. According to Bernstein, while some niche startups may survive, their long-term market share will likely remain limited, and competition will primarily be between established original equipment manufacturers (OEMs). The key challenge for these OEMs is achieving the scale and cost reductions required to compete with the well-entrenched internal combustion engine (ICE) sector. <h2>Reliance on incentives</h2>One of the most striking conclusions from Bernstein’s analysis is the deep reliance of the EV sector on government subsidies. Without these incentives, the <keyword id="19952060" type="General" weightage="100" keywordseo="EV-Industry" source="keywords">EV industry</keyword> would be unable to compete with traditional ICE vehicles. “The EV Industry is not relevant without incentives currently, and to break the ICE sector, it needs intense focus, scale, and continued cost downs,” the report emphasised. This indicates that while government schemes like GST benefits have helped reduce the cost difference between EVs and ICE vehicles, they are not enough to ensure the long-term sustainability of the EV sector. Bernstein estimates that the overall EV two-wheeler industry in India generates around USD 1.3 billion in annual revenues, but without government support, the sector incurs an EBIT loss of approximately USD 300-400 million. The high cost structure of EVs, combined with the relatively low sales volumes, makes it difficult for companies to operate without subsidies. <h2>Established players face mixed fortunes</h2>Among India’s leading two-wheeler manufacturers, Bernstein noted that <keyword id="19897354" type="General" weightage="20" keywordseo="Bajaj-Auto" source="keywords" meta.keywordsubtype="org" meta.entityname="Bajaj Auto" meta.hostid="265" meta.entityid="Bajaj Auto">Bajaj Auto</keyword> and <keyword id="20326963" type="General" weightage="20" keywordseo="TVS-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="TVS Motors" meta.hostid="265" meta.entityid="TVS Motors">TVS Motors</keyword> are on a similar footing in terms of their performance in the EV space. Bajaj Auto received an "Outperform" rating from Bernstein due to its lower valuations, while TVS Motors was rated "Market Perform" after it was found to be losing approximately 7.5% in EBITDA, or Rs 11,000 per vehicle, despite generating a gross profit margin of 7% without subsidies. <div type="Article" hostid="261" msid="113631992" title="Tata Nexon EV with a bigger battery launched starting at ₹13.99 lakh" mstype="2" mssubtype="0"></div>Hero MotoCorp, a major player in India’s automotive market, lags behind both Bajaj and TVS in terms of its EV offerings. Bernstein also pointed out that Eicher Motors, which is expected to launch its own <keyword id="19895203" type="General" weightage="20" keywordseo="electric-vehicles" source="keywords">electric vehicles</keyword> soon, is likely to remain “sub-scale and less relevant” in the competitive EV landscape. Interestingly, <keyword id="19897349" type="General" weightage="20" keywordseo="Ola-Electric" source="keywords" meta.keywordsubtype="org" meta.entityname="Ola Electric" meta.hostid="265" meta.entityid="Ola Electric">Ola Electric</keyword> (Ola-E) stands out as a startup that has been able to generate positive operating earnings (EBITDA) from its premium models like the S1 Pro and S1 Air, even as it incurs losses on its mass-market model, the S1X. “Our analysis indicates that Ola-E is generating positive operating EBITDA from its premium models, such as the S1 Pro and S1 Air while incurring a loss on its mass-market model, the S1X,” the report said. While Ola has shown some promise, it too remains heavily dependent on subsidies to maintain its financial health. <h2>Long-term outlook</h2>Bernstein’s report paints a challenging picture for the future of India’s EV sector, suggesting that while dominant startups may survive, the majority of the competition will come from traditional automakers. However, without significant scale and continued cost reductions, the EV industry will struggle to become self-sustaining. <div type="Article" hostid="261" msid="113315022" title="Waiting for the festive season to buy an EV? Cabinet approves PM E-Drive subsidising most EVs, sans electric cars" mstype="2" mssubtype="0"></div>Bernstein emphasised that to truly compete with ICE vehicles, the EV sector needs to focus on scaling up operations, reducing costs, and maintaining long-term commitment. Until these conditions are met, India’s EV industry will remain highly dependent on government support and may continue to face an uphill battle for relevance. In conclusion, while India’s EV sector is seen as a vital part of the country’s clean energy future, Bernstein’s analysis highlights that it is far from being self-reliant. The industry’s heavy dependence on government incentives raises questions about its long-term sustainability and relevance, particularly in the face of ongoing challenges with profitability and scale. (With inputs from ANI)

Why has Bernstein called India’s EV sector 'irrelevant'?

<keyword id="19955648" type="General" weightage="20" keywordseo="Adani-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="Adani Group" meta.hostid="261" meta.entityid="Adani Group">Adani Group</keyword> released the composite result and Credit Compendium of Adani Group of <keyword id="20027214" type="General" weightage="20" keywordseo="companies" source="keywords">companies</keyword> for Q1 FY25. The Results Compendium provides a comprehensive overview of the <keyword id="20088085" type="General" weightage="20" keywordseo="financial-performance" source="keywords">financial performance</keyword> of the Adani Portfolio, while the Credit Compendium offers in-depth insights into the portfolio's robust credit strength. According to the results, the strong performance for the quarter was led by <keyword id="20113873" type="General" weightage="20" keywordseo="Adani-Enterprises" source="keywords" meta.keywordsubtype="org" meta.entityname="Adani Enterprises" meta.hostid="261" meta.entityid="Adani Enterprises">Adani Enterprises</keyword>' emerging businesses, including solar and wind manufacturing. In a press release, the company stated that it has emerged as India's largest player in the fully integrated <keyword id="19990484" type="General" weightage="20" keywordseo="green-hydrogen" source="keywords">green hydrogen</keyword> chain, as well as in the airports and roads sectors. The company added that AEL's infrastructure businesses' steadily rising contribution is playing a significant role in this growth, with <keyword id="19957744" type="General" weightage="20" keywordseo="EBITDA" source="keywords">EBITDA</keyword> expanding by 69.98 per cent YoY. These fast-growing businesses now contribute 13.3 per cent to the portfolio-level EBITDA, up from 7.2 per cent a year ago. The overall EBITDA of Adani Group companies surged by 32.87 per cent year-on-year (YoY) to reach Rs 22,570 crore, resulting in a trailing twelve-month (TTM) EBITDA of Rs 79,180 crore, marking a 45.13 per cent increase over the corresponding TTM of the previous year. The Adani Group highlighted that its 'Core Infrastructure' platform comprises AEL's (Adani Enterprises) Infrastructure businesses, Utility (Adani Green Energy, Adani Power, Adani Energy Solutions, and Adani Total Gas), and Transport (Adani Ports &amp; SEZ) businesses. The Solar module manufacturing business of the group saw module sales rise by 125 per cent YoY in the quarter. Furthermore, the operationalization of photovoltaic cell lines lowered costs, resulting in higher profitability. The airport business also continues to see strong growth from rising passenger movement, increasing consumer offerings, and the addition of routes, airlines, and flights across seven operational airports. Adani Enterprises' performance indicates that in airports, the annual passenger movement across 7 airports crossed 90 million for the first time. During the quarter, eight new routes, six new airlines, and 13 new flights were added across all seven airports. Additionally, 25 new brands were introduced at Lucknow airport after the inauguration of Terminal 3. The road business achieved its highest-ever 730 lane-km construction during this quarter. In the Adani Green Energy segment, construction work for a 500 MW hydro pump storage has commenced, with a 31 per cent YoY capacity addition during the quarter. Another 250 MW wind capacity was operationalized in July at Khavda, bringing the total capacity to 11.2 GW. Adani Energy Solutions stated that the Khavda-Bhuj Transmission Line (KBTL) is fully commissioned, enabling 3 GW green power evacuation from Khavda. The 1,765 ckm Warora Kurnool Transmission Line (WKTL) was also fully commissioned, strengthening the national grid by ensuring seamless power flow between the western and southern regions. Adani Ports &amp; SEZ reported that Vizhinjam port, India's first transhipment port equipped with South Asia's most advanced container-handling technology, was formally commissioned in July and will become operational in November. In the Cements segment, the promoters infused Rs 15,000 crore in two tranches in Ambuja Cements in March and April, fully subscribing to the warrant program and infusing a total of Rs 20,000 crore since the acquisition in September 2022. The company also acquired Penna Cement, increasing the total capacity to 89 MTPA. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-9-pro-fold-launched-in-india-at-172999-but-you-cant-get-your-hands-on-it-right-now/articleshow/112517193.cms">Google Pixel 9 Pro Fold launched in India at ₹1,72,999, but you can’t get your hands on it right now</a> <a href="https://www.businessinsider.in/stock-market/news/ipo-scam-two-victims-from-hyderabad-lose-over-11crore-in-fake-ipo-scams/articleshow/112488051.cms">IPO scam – Two victims from Hyderabad lose over ₹11 crore in fake IPO scams</a> <a href="https://www.businessinsider.in/tech/news/indias-wearables-market-decline-for-the-first-time-as-smartwatch-shipments-fall/articleshow/112397246.cms">India’s wearables market decline for the first time as smartwatch shipments fall</a>

EBITDA of Adani Group companies surged by 32.87% year-on-year to ₹22,570 crore

On Tuesday, <keyword id="19907441" type="General" weightage="20" keywordseo="Aditya-Birla-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="Aditya Birla Group" meta.hostid="261" meta.entityid="Aditya Birla Group">Aditya Birla Group</keyword>'s <keyword id="20102108" type="General" weightage="20" keywordseo="metal" source="keywords">metal</keyword> flagship <keyword id="20318152" type="General" weightage="100" keywordseo="Hindalco-Industries" source="keywords" meta.keywordsubtype="org" meta.entityname="Hindalco Industries" meta.hostid="261" meta.entityid="Hindalco Industries">Hindalco Industries</keyword> reported a 25.2% rise in consolidated profit at Rs 3,074 crore for the June quarter, on the back of favourable macros, operational efficiencies and lower input costs. The company had posted a consolidated profit of Rs 2,454 crore in the year-ago period, <keyword id="20129733" type="General" weightage="20" keywordseo="hindalco" source="keywords">Hindalco</keyword> Industries said in a regulatory filing. In a statement, the company said the consolidated PAT in the first quarter of FY'25 was Rs 3,074 crore, compared to Rs 2,454 crore in Q1 FY24, up by 25 % year-on-year (YoY)." Total income during the quarter under review rose to Rs 57,437 crore, over Rs 53,382 crore noted in the year-ago period. The consolidated revenue for the first quarter stood at Rs 57,013 crore, up 8% YoY, on account of better realisations and efficiencies in India operations. "Hindalco reported an <keyword id="19957744" type="General" weightage="20" keywordseo="EBITDA" source="keywords">EBITDA</keyword> of Rs 7,992 crore (vs Rs 6,109 crore in Q1FY24) in Q1 FY25, up 31% YoY, driven by lower input costs and higher volumes," the statement said. "Our strong Q1 results ride on the back of consistent operational excellence and cost optimisation which allowed us to leverage the higher average metal prices. "The <keyword id="20076812" type="General" weightage="20" keywordseo="copper" source="keywords">copper</keyword> business achieved its highest quarterly EBITDA driven by high domestic sales (especially downstream products), healthy by-product credits and better operational efficiencies following a successful planned shutdown," Satish Pai, Managing Director, Hindalco Industries said. The <keyword id="20472150" type="General" weightage="20" keywordseo="aluminium" source="keywords">Aluminium</keyword> India upstream business recorded an 81% growth in EBITDA over the previous year, he said. "Looking ahead, the major capital formation phase of the downstream business is near completion, and from here on, we will explore growth opportunities in the upstream business, given our strong cash position," he explained. The company said its copper business delivered a new record-breaking performance in the first quarter, with EBITDA at an all-time high of Rs 805 crore, up 52% YoY, backed by higher average copper prices and robust operations. Hindalco Industries Ltd is the metal flagship company of the Aditya Birla Group. A 26 billion dollar metals powerhouse, Hindalco is the world's largest aluminium company by revenues, and the world's second largest Copper rods manufacturer (outside China). Hindalco operates across the value chain, from bauxite mining, alumina refining, coal mining, captive power plants and aluminium smelting to downstream rolling, extrusions, and foils. Along with its subsidiary <keyword id="20665479" type="General" weightage="20" keywordseo="novelis" source="keywords">Novelis</keyword>, Hindalco is the global leader in flat-rolled products, and the world's largest recycler of aluminium. Hindalco is the country's largest copper producer, serving more than half the nation's copper requirements. Its copper facility in Gujarat, comprises a copper smelter and refinery complex, downstream facilities, and a captive jetty. Hindalco's global footprint spans 52 manufacturing units across 10 countries.

Hindalco Q1 profit rises 25% Rs 3,074 crore on operational efficiencies, lower input costs

All you need to know about GM Breweries

<keyword id="19938772" type="General" weightage="20" keywordseo="Reliance-Industries-Ltd" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Industries Ltd" meta.hostid="267" meta.entityid="Reliance Industries Ltd">Reliance Industries Ltd</keyword> has won a vote of confidence from global rating agencies <keyword id="20043943" type="General" weightage="20" keywordseo="SP" source="keywords">S&amp;P</keyword> and <keyword id="19950093" type="General" weightage="20" keywordseo="Fitch" source="keywords">Fitch</keyword> after its robust earnings in the fiscal year ended March 31, 2024, supported its growth aspirations and kept leverage under check. S&amp;P Global Ratings and Fitch Ratings in separate notes spoke of its <keyword id="19957744" type="General" weightage="20" keywordseo="EBITDA" source="keywords">EBITDA</keyword> (loosely known as pre-tax profit) rising in the current fiscal year and next on rising revenue and past investments. "<keyword id="19896380" type="General" weightage="20" keywordseo="Reliance-Industries" source="keywords">Reliance Industries</keyword> Ltd's (<keyword id="20002939" type="General" weightage="20" keywordseo="ril" source="keywords">RIL</keyword>) strong earnings will keep leverage in check as the company continues to pursue growth ambitions. We expect the company's debt-to-EBITDA ratio to remain commensurate with the rating (BBB+/Stable/--)," S&amp;P said in a note. The oil-to-telecom-and-retail conglomerate's growth aspirations remain intact, it said, adding the company has ramped up investments in the media business in recent months. In 2024, it entered into binding definitive agreements with The Walt Disney Co for a media joint venture in which RIL will invest Rs 11,500 crore. The company subsequently agreed to buy Paramount Global's 13.01 per cent stake in local entertainment network Viacom18 Media Pte Ltd for about Rs 4,300 crore. "These investments are in line with RIL's strategy to diversify and have a strong presence in a few key industries," the rating agency said. Also, the company received government approval in 2024 to develop gas reserves in the KG-D6 block in the Bay Of Bengal. This could increase the company's gas production capacity by 13-17 per cent. RIL's earlier announced investments include a Rs 75,000 crore expansion plan over five years (starting 2022) for the oil-to-chemicals business. "RIL's earnings will benefit from past investments," S&amp;P said. "We project the company's adjusted EBITDA will rise 2-4 per cent in fiscal 2025 (year ending March 31, 2025)," it added. Just as in the past two years, the digital services segment (Reliance Jio Infocomm Ltd) will be the key growth driver, with segment's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) increasing 10-12 per cent in fiscal 2025. Reliance Jio's wireless subscriber base and average revenue per user will gain from the company's investments in its 5G network since late 2022. Meanwhile, earnings in the oil and gas as well as retail segments will reap the rewards of increased production volume and a wider retail store network. "The EBITDA improvement that we expect in fiscal 2025 comes after a 14 per cent increase to Rs 1.6 lakh crore in fiscal 2024," it said. S&amp;P saw RIL's rising earnings providing it greater balance-sheet flexibility for growth. "We expect the combination of robust operating performances and continued spending to keep the company's debt-to-EBITDA ratio at 1.8x-2.0x over the next two years. This compares with our estimate of 1.7x for fiscal 2024 and our downgrade trigger of 2.5x," S&amp;P said. RIL's leverage has some distance from the upper end of the company's internal leverage target. RIL has reiterated its intention to keep its net debt-to-EBITDA ratio (by its own calculations) below 1x. The ratio was 0.65x as of March 31, 2024. Separately, Fitch Ratings said RIL's EBITDA net leverage is likely to remain below 1x in the medium term, supported by increasing cash flows and lower capex intensity, even as the conglomerate's absolute capex and investments remain high in the near term. "We expect RIL's EBITDA to increase by 8 per cent year-on-year in the financial year ending March 2025 (FY25) and 14 per cent in FY26, while capex intensity (capex/revenue) is likely to reduce below 13 per cent by FY26 (FY24: 15.3 per cent). Lower capex intensity would be driven by growing revenue and reduction in capex after FY25," it said. Fitch expected the conglomerate's Cash Flow from Operations (CFO) to be sufficient to fund its capex from FY26, which will limit additional debt funding and keep its EBITDA net leverage below 1.0x in the medium term (FY24: 0.9x, FY23: 1.1x). "Fitch estimates RIL's FY24 EBITDA net leverage at 0.9x, better than our expectation of 1.1x, driven by marginally higher EBITDA and Rs 20,900 crore of equity raised mainly from the sale of a stake in a subsidiary, even as its capex remained high at Rs 1.5 lakh crore (FY23: Rs 1.4 lakh crore)," the rating agency said in a statement. It rates RIL at 'BBB'/Stable, one notch above India's rating (BBB-/Stable). "We expect the EBITDA increase in the near to medium term to be driven by the telecom and retail businesses, supported by contribution from the upstream oil and gas segment and marginal recovery in petrochemical spreads in the oil to chemical (O2C) segment," Fitch said, adding EBITDA from digital services, largely telecom, is likely to benefit from a 10-15 per cent tariff hike and 15-20 million of additional subscribers in FY25 (FY24: 482 million subscribers). Digital services EBITDA rose by 13 per cent in FY24, as Reliance added 42 million subscribers and monthly average revenue per user increased to Rs 182. Monthly user data consumption increased by 24 per cent to 28.7 GB, one of the highest globally. Fitch expected retail EBITDA to increase by 20-25 per cent in FY25 (FY24: 28%) as Reliance continues to expand its physical stores and digital channels. EBITDA would be supported by a 22.2 per cent increase in its registered customer base to 304 million in FY24. Also, O2C segment EBITDA is expected to remain above Rs 60,000 crore in FY25 (FY24: Rs 62,400 crore), as a gradual improvement in petrochemical spreads from FY24 lows is expected as a supply overhang recedes. Upstream oil and gas EBITDA should stay at around Rs 20,000 crore in FY25 (FY24: Rs 20,200 crore), assisted by the expectation of a 10 per cent increase in gas production in the first full year of operation of three gas fields in the KG-D6 block, which should offset the potential reduction in price realisation with lower gas prices in international benchmarks. 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Reliance gets thumbs-up from S&P, Fitch as strong earnings keep leverage in check

<ul><li><keyword id="830092" type="General" weightage="20" keywordseo="zomato" source="Orion">Zomato</keyword>’s promise to turn net profit positive in a year has cheered investors. </li><li>Margins in its core food delivery business has hit a multi-quarter high. </li><li>The worry? Monthly transacting users and gross order value has declined versus the previous reported quarter. </li><li>Nomura believes Zomato will find it difficult to achieve double-digit contributory margin with high growth in the long term </li></ul>Two years after it listed on the bourses, Zomato is on a recovery path. The stock which hit a high of over ₹150 per share fell sharply subsequently to below ₹50 a piece. However, the last quarter (Q1FY24) has seen a recovery from that level and it has now surpassed its listing price of ₹76. The stock has been rising steadily in the last three weeks, after its Q4 earnings report where it turned EBITDA positive in its core business, without including Blinkit, its quick commerce business. EBITDA is net income (earnings) with interest, taxes, depreciation, and amortisation. Moreover, the management also promised to turn positive not just at the consolidated adjusted EBITDA level but also at the profit after tax level in a year. Financial services company, JM Financial says this commitment is the ‘cherry on the cake’. “Tough macro posed growth headwinds but management showed urgency on profitability and that was despite the Gold programme launch,” said Jefferies. Zomato Gold is a subscription plan that offers free deliveries within a 10-kilometre radius for orders above ₹199. During the quarter, as many as 30% of the gross order value, from 1.8 million customers, came from Gold. The Gold plan could hurt its contributory margins (CM) because of its inability to charge every order. Yet, as of Q4, its CM in core food delivery business are comfortable after hitting a multi-quarter high. Contributory margins represent the incremental money generated for each unit sold after deducting the variable portion of the costs. “The core business milestone was achieved mainly on the back of solid expansion in the food delivery contribution margin to 5.8% in Q4 vs 5.1% in Q3. This was because profitability levers such as improvement in restaurant commissions and ad income, and lower discounts/variable cost offset the adverse impact of Gold launch,” said JM Financial. Ordering effects After the post-pandemic boom effects faded away, a lot of consumption patterns have changed, also evident in consumer spending on fast food — impacting growth in quick service restaurants. These headwinds have been impacting Zomato as well. The growth in Zomato’s food delivery business seems to have flatlined. Food gross order value declined 2% quarter-on-quarter, even as it grew 12% year-on-year. Moreover, its monthly transacting users (MTU) declined by 5% QoQ to 16.6 million, while growing at 6% YoY. Apart from the one-time impact of its decision to exit from 225 cities, the company attributes MTU decline to optimised marketing spend and withdrawal of the human support interface for abusive customer cohorts. “Also because of Zomato Gold, the MTUs have come down and not gone up because we do see an impact of clubbing some orders in the same households, which might have just a single membership,” Akshant Goyal, chief financial officer of Zomato said in an earnings concall. The management, however, remains confident about food delivery ordering going up in the first quarter of FY24. Analysts, on the other hand, are not too confident about their ability to sustain growth beyond the first quarter as summer holiday and IPL impact during April/May are one-off events. Its other businesses, however, continue to display good growth. Blinkit’s gross order value grew 17% QoQ, while order volume grew 24%. Revenues of Hyperpure, its business to supply ingredients to restaurants, grew 13.5% QoQ. Offsetting margins with growth While it’s on a path to profitability, Zomato is also caught between a rock and a hard place — of growth versus margins. To boost growth, it will have to go in for discounts – the lack of aggressive discounting by all players is already visible in the moderation in food ordered during the IPL season, generally a big occasion for online food platforms. This year, the IPL spike in food ordering was at a modest 7% for the industry as compared to the 2020 IPL when it was over 50%, as per Redseer. This time, there were no high <a href="https://www.businessinsider.in/business/news/ipl-2023-sees-tier-2-cities-order-more-on-swiggy-zomato/articleshow/100673879.cms">decibel ads along with deep discounts.</a> Like other players in the business, the company will also find it tough to keep up with the high margin trajectory, while also chasing growth. “Overall, we lower our growth assumptions for its food delivery’s gross order value growth, from around 20% to around 17%, but raise our FY24F contributory margin estimate from 5.8% to 6.5%. We continue to believe Zomato will find it difficult to achieve double-digit contributory margin, with high growth in the long term,” said Nomura. Restaurant commissions grow but may hit an ONDC wall In the last two years, the company was also able to improve take rates or the commissions it charges restaurants consistently. Its take rates are now close to 18%. “Broadly, with our take rates, the mission is to be competitive, and we are lower than what the competition is charging. So, as we continue to add more value to restaurant businesses, we expect some improvement in commission revenue going forward,” said Goyal. But competition is heating up in the sector. The Department for Promotion of Industry and Internal Trade’s Open Network for Digital Commerce (ONDC) has breached the territory that was hitherto dominated by Zomato along with Swiggy. On the face of it, it might seem like restaurants might be offered better terms on ONDC. While Zomato will be able to compete with ONDC on efficiency and also even overall costs – as third party deliveries might be costlier– HSBC Global Research believes that it might flatten growth. “Estimates for food delivery revenue in the long term remain largely unchanged. Our short-term estimates change slightly as we build in a marginally slower increase in take rate,” the research firm said. In spite of short-term and long-term challenges ahead, Zomato seems to have settled into its listed company status to deliver value to investors by chasing topline growth instead of customers, with discounts.

With Zomato rallying over 25% in the past month, street looks at the road ahead

<ul><li>The Nasdaq-listed Indian company’s total income went up 47% in Q4 compared to the same period last year. </li><li>By the end of the financial year, the company’s power capacity increased 28% on a YoY basis. </li><li><keyword id="944686" type="General" weightage="20" keywordseo="renew-power" source="Orion">Renew Power</keyword> says it expects to build 1,750-2,250MW of power capacity by the end of FY24. </li></ul>ReNew, one of India’s top green energy companies, posted a net profit of ₹7.4 crore ($1 million) for the fourth quarter of FY23. In the same quarter last year, it posted a net loss of ₹355 crore ($43 million). The Nasdaq-listed company saw its total income go up by 47% to ₹2,591 crore or $315 million on a YoY basis. Its adjusted EBITDA for the quarter stood at ₹1,201 crore ($146 million) as against ₹1,279 crore ($156 million) in Q4 FY22. EBITDA is earnings before interest, tax,depreciation and amortisation. By the end of FY23, the company’s portfolio consisted of 13.7 GW — which increased 28% on a YoY basis. Of this, around 8 GW is commissioned and 5.7 GW is committed. The renewable energy company with interests in wind and solar energy said that it has signed power purchase agreements (PPAs) with various buyers to the tune of 101 megawatts during the quarter. “Only around 1% of our total portfolio have Letters of Award that await a PPA,” the company said in a press release. Its ability to collect payments also improved for the quarter over the last year, with Days Sales Outstanding at 138 days — which showed a 74-day improvement. Days sales outstanding is the average number of days that it takes to collect payment after a sale has been made. This is key for power generators who sell to utilities. For FY23, its total revenue increased by 29% to ₹8,930 crore ($1,087 million). However it posted a net loss of ₹503 crore ($61 million) for the financial year. For FY24, the company’s guidance involves generating a cash flow to equity of ₹600-800 crore. It also intends to post an adjusted EBITDA of ₹6,000-6,600 crore. This guidance however is subject to weather being similar to FY23, the company says. It also intends to build 1,750-2,250MW of power capacity by the end of the financial year.

ReNew Power posts net profit of $1 mn for Q4 but ends FY23 in the red

Paytm, leading payments and financial services company, on Friday said it has achieved operating profitability with <keyword id="63060" type="General" weightage="20" keywordseo="ebitda" source="Orion">EBITDA</keyword> before ESOP cost at Rs 31 crore, much ahead of its September 2023 guidance. Paytm's revenue from operations increased to Rs 2,062 crore (no <keyword id="6358921" type="General" weightage="50" keywordseo="upi" source="Orion">UPI</keyword> incentive recorded this quarter), a growth of 42 per cent YoY and 8 per cent QoQ. The growth was driven by increased adoption by consumers and subscription services by merchant partners along with sustained growth seen in loan distribution and commerce business, said the company. Paytm's founder and CEO <keyword id="914589" type="General" weightage="80" keywordseo="vijay-shekhar" source="Orion">Vijay Shekhar</keyword> <keyword id="445" type="General" weightage="20" keywordseo="sharma" source="Orion">Sharma</keyword> wrote a letter to shareholders announcing the achievement. "This has been made possible due to the relentlessly focused execution by our team. The team was asked to focus on growth with quality revenues that contribute to the bottom line. We have achieved this milestone without losing sight on growth opportunities and keeping all compliances as well as risk factors under a strict watch," he said. Contribution profit was Rs 1,048 crore in the quarter, with margins consistently improving from 31 per cent in December 2021 to 51 per cent in December 2022 on account of improved profitability of payments business and increased mix of high margin businesses such as loan distribution. Net payment margin grew to Rs 459 crore (up 120 per cent YoY) on back of improved profitability in the payments business. Paytm's EBITDA before ESOP margin stood at 2 per cent of revenues as compared to (27 per cent) a year ago, due to sustained improvement in contribution profit and strong operating leverage. The company said it continued to witness strong revenue momentum across its businesses. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/adani-enterprises-sbi-life-hdfc-life-among-stocks-in-focus/articleshow/97567830.cms">Sensex, Nifty50 close in the green powered by financial services and auto stocks</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/adanis-stock-rout-can-impact-its-ability-to-raise-capital-or-refinance-debt-says-moodys/articleshow/97582403.cms">Adani’s stock rout can impact its ability to raise capital or refinance debt, says Moody’s</a>

Paytm founder announces operating profitability, says free cash flow generation is next

<ul><li>While Zomato’s sales have been increasing, the food delivery giant is still unable to make profits on account of huge expenses led by discounts and marketing.</li><li>It posted a net loss of ₹1,222 crore for the March quarter, which is an increase of nearly 50% since last year.</li><li>However, analysts believe the food delivery business has a huge potential as it is estimated to be a $110 billion opportunity by 2025.</li><li>Both Zomato and its rival Swiggy together hold 90-95% market share in India’s food delivery business.</li></ul>Food delivery company Zomato has been reeling under the pressure to turn profitable since July last year, <a href="http://a-strong-public-market-debut-at-51-premium-shares-open-at-115/articleshow/84667265.cms">the day it went public </a>and raised over ₹9,000 crore from the public. Since its listing, Zomato investors have seen their wealth decline by half, and there seems to be no letting up yet. Brokerages believe there might be a chance for the company to woo investors in a few years as there lies a huge opportunity in front of them. According to a report by JM Financial, Zomato’s path to operational profitability (also known as EBITDA profitability) requires two things. EBITDA is short for earnings before interest, taxes, depreciation and amortisation. “We believe order volumes and contribution margin per order are two key variables that would determine Zomato’s path to profitability. Our analysis suggests the company can turn profitable in FY25 on a cash EBITDA basis if it were to reach annual order volumes of 1 billion (2.5x FY20 levels) and a contribution margin of around ₹21 per order,” said the report. Adding to it, the report says it sees a ramp-up beyond the food ecosystem can also provide incremental growth. It expects Zomato to follow global peers in terms of expanding beyond food delivery and explore adjacencies in the form of grocery delivery, alcohol delivery, medicine delivery, on-demand delivery and insta shopping. Its recent investment in Grofers and a majority stake in Fitso is a validation of expansion into adjacent areas, states the report. Gen Z population offers attractive growth opportunities to Zomato The number of online shoppers in India is <a href="https://www.businessinsider.in/business/ecommerce/news/india-will-have-more-ecommerce-users-by-2025-than-us-population/articleshow/92062424.cms">expected to grow </a>to 300- 350 million by FY25 from 100-110 million in FY20 according to Bain &amp; Company. “With around 10 million monthly active users, the current penetration rate for Zomato within the online product shopper base works out to around 10%. We expect this penetration to increase to around 15% over the next 5 years, effectively growing the monthly active user base of Zomato to 45 million by FY26,” said the report. The brokerage expects the growth to be driven by the growing share of millennials/Gen Z in the ‘earning’ population and fast-growing e-commerce penetration beyond Tier-1 cities. Customer addition remains strong, but 9 out of 10 orders are from old users New customer additions by Zomato remained strong in Jan-Mar with around 5.5 million new additions. However, more than 90% of its food delivery business is being driven by repeat users compared to new users. “The company expects growth in the near term to be driven by repeat customers as there is substantial room for improvement in average annual ordering frequency (which is around 10 per user per year),” said the report by JM Financial. Zomato now operates in more than 1,000 cities across India as it added 300 plus new cities in Jan-Mar. Top 8 cities contributed around 60% to gross order value. However, its losses continue to swell, ballooning by nearly 50% in the March quarter to ₹1,222 crore, when compared to the previous year. Some analysts believe the change in the company’s performance needs to happen soon to turn around the loser story. “With the current inflation, the margins will lower further due to increased cost of fuel, raw materials etc. Acquiring different companies won’t help much in expansion, rather it will make management more difficult,” said Majoj Dalmia, founder and director at Proficient Equities. “Existing management needs to be optimised for profitability; the growth prospects will depend on current performance and not future, if there is a turnaround now, then we can expect some good growth story,” he added. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/business/startups/news/pepper-content-raises-14-million-to-enter-the-us-market/articleshow/92084581.cms">INTERVIEW: Pepper Content skip the traditional Middle East route, heads directly for the US market</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/stock-market/news/wipro-yes-bank-tata-power-among-stocks-to-watch-out-for-on-june-9/slidelist/92094551.cms">Wipro, Yes Bank, Tata Power among stocks to watch out for on June 9</a>

You Searched For "ebitda" and got 10 results

Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

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With Zomato rallying over 25% in the past month, street looks at the road ahead

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