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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

<ul><li><keyword id="19901323" type="General" weightage="20" keywordseo="Zomato" source="keywords" meta.keywordsubtype="org" meta.entityname="Zomato" meta.hostid="261" meta.entityid="Zomato">Zomato</keyword> and <keyword id="19896956" type="General" weightage="20" keywordseo="Swiggy" source="keywords" meta.keywordsubtype="org" meta.entityname="Swiggy" meta.hostid="261" meta.entityid="Swiggy">Swiggy</keyword> have increased the <keyword id="20299300" type="General" weightage="100" keywordseo="platform-fee" source="keywords">platform fee</keyword> charged to users by 20%.</li><li>With this increase, the platform fee has increased from ₹5 to ₹6.</li><li>The platform fee charged is different from GST, delivery charges and restaurant charges applied on the platforms.</li></ul> Your food deliveries will get costlier as Zomato and Swiggy have started increasing the platform fee by 20%. The <keyword id="19922227" type="General" weightage="20" keywordseo="food-delivery-platforms" source="keywords">food delivery platforms</keyword> will now charge users ₹6 per order. Food delivery platforms Zomato and Swiggy introduced platform fees in 2023, which began at ₹2 per order. This was then increased to ₹3 and then to ₹5 in April 2024. <h2>Platform fee increases threefold</h2>In yet another increase, the two food delivery platforms have increased the platform fee to ₹6. This means that the platform fee has increased threefold in a year. The platform fee is different from other charges levied on orders such as GST, delivery charges and restaurant charges. Customers are required to pay this charge irrespective of any membership such as<a href="https://www.businessinsider.in/business/news/swiggy-cracks-down-on-password-sharing-allows-users-to-use-same-account-on-only-two-devices/articleshow/97548345.cms"> Swiggy One</a> or<a href="https://www.businessinsider.in/tech/apps/news/zomato-gold-re-launched-with-free-deliveries-vip-access-up-to-40-discount-on-dining-and-more/articleshow/97273088.cms"> Zomato Gold</a>. The increased platform fee is currently being tested in selected cities such as Delhi and Bengaluru. It is expected to be rolled out in a phased manner across all major cities. While an increase of ₹1 may seem insignificant to most people who place orders online, it adds up to a good source of revenue for Swiggy and Zomato which process lakhs of orders every day. Platforms such as Zomato and Swiggy aim to earn ₹1.25 to ₹1.5 crore per day through platform fees. <h2>Customers not happy</h2>Customers have not reacted positively to this news. Posts on platforms like X have criticised this move, calling for users to directly order from restaurants. <div type="twitter" handle="trippyankit" handlename="trippyankit" favoritecount="0" retweetcount="0" id="1812756936669921328"></div> The user highlighted that food prices are already comparatively higher on food delivery platforms. The difference in price is due to the commission paid by restaurants to Swiggy and Zomato, which usually ranges between 20 to 30%. <h2> Zomato share price surges</h2>Zomato’s share price increased by 3% to close at ₹229.10 on Monday after the company increased the platform fee. The company’s share price has increased by over 70% in the last six months, helping the company’s chief executive officer (CEO)<a href="https://www.businessinsider.in/stock-market/news/zomatos-deepinder-goyal-joins-elite-list-of-indian-billionaires/articleshow/111747793.cms"> Deepinder Goyal</a> become a billionaire. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/webstories/iqoo-z9-lite-5g-with-90hz-display-5000mah-battery-launched-starting-at-10499/slidelist/111754545.cms">iQOO Z9 Lite 5G with 90Hz display, 5000mAh battery launched starting at ₹10,499</a> <a href="https://www.businessinsider.in/tech/mobile/news/global-smartphone-shipments-grow-6-5-in-q2-2024-xiaomi-records-highest-growth/articleshow/111749023.cms">Global smartphone shipments grow 6.5% in Q2 2024, Xiaomi records highest growth</a> <a href="https://www.businessinsider.in/stock-market/news/ipos-this-week-four-ipos-to-hit-the-street-this-week/articleshow/111745283.cms">IPOs this week – four IPOs to hit the street this week</a>

Zomato and Swiggy increase platform fee by 20% – food deliveries to get costlier

Once the Rs 4,447 crore (about $568 million) acquisition of <keyword id="12724311" type="General" weightage="20" keywordseo="blinkit" source="Orion">Blinkit</keyword> is closed, <keyword id="830092" type="General" weightage="20" keywordseo="zomato" source="Orion">Zomato</keyword> will experiment with cross leveraging its customers base for Blinkit and vice versa, its Founder and CEO <keyword id="476451" type="General" weightage="20" keywordseo="deepinder-goyal" source="Orion">Deepinder Goyal</keyword> has stressed. Goyal said that in India, super brands will work better than super apps. "Which means that the Blinkit app will continue to operate independently. We will also start working on integrating the delivery fleet back-ends which should drive higher delivery efficiency over time," he said in the letter to shareholders. Tech integrations between the two companies will accelerate the pace of progress at both ends, he added. According to the company, the losses for Blinkit are coming down every month -- from Rs 2,040 million (about $26 million) in January 2022 to Rs 929 million ($12 million) in July. "The losses have come down owing to a) operating leverage and b) improved execution. As the GOV (gross order value) per day per store goes up, losses come down given the high operating leverage in the business," said Zomato CFO Akshant Goyal. The company said that Blinkit has also shut down a number of unviable dark stores, which were not scaling and the team will continue to evaluate non-performing stores. In just six months, the Blinkit business has scaled to 20 per cent of Zomato's food delivery GOV while being present in less than 15 cities. According to Akshant, Zomato took about 45 months since the launch of food delivery to get to the current monthly GOV scale of Blinkit. Deepinder said that there is a misconception that Zomato would have gotten to the same (or perhaps bigger) scale and size had we launched quick commerce organically seven months ago. Akshant added that in Gurugram, Blinkit GOV is 70 per cent of Zomato food delivery GOV (for June). "Quick commerce cuts across a wide range of essential spends including grocery, fruits and vegetables, beauty and personal care, OTC medicines, stationery items, among others. Therefore, we expect the overall customer base, average order value as well as monthly order frequency to be higher than food delivery," he mentioned. With continued solid execution and synergy realisation with Zomato, post the transaction, the Blinkit journey to profitability "should only accelerate", the company noted. Zomato reported Rs 185.7 crore in consolidated loss for the quarter ending June 30, compared to a loss of Rs 359.7 crore in the previous quarter. The consolidated revenue saw 67 per cent increase at Rs 1,413.9 crore from Rs 844.4 crore (same quarter last year), and 16.68 per cent up from Rs 1,211.8 crore in the last reported quarter. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/markets-on-a-wait-and-watch-mode-as-they-await-cues-from-rbi/articleshow/93290015.cms">Markets on a wait and watch mode as they await cues from RBI</a> <a href="https://www.businessinsider.in/business/auto/news/as-new-cars-get-pricier-pre-owned-bmws-audis-and-porsches-get-more-attractive/articleshow/93275786.cms">As new cars get pricier, pre-owned BMWs, Audis and Porsches get more attractive</a> <a href="https://www.businessinsider.in/business/startups/news/physicswallah-purplle-leadsquared-and-open-were-the-only-for-unicorn-of-last-quarter-in-india/articleshow/93271392.cms">In the funding winter, only four companies turn unicorns in the June quarter</a>

Zomato, Blinkit will cross-leverage each other's customer base soon, says Deepinder Goyal

<ul><li>Zomato has ceased operations in 225 smaller cities as their performance was ‘not very encouraging’ in the past few quarters.</li><li>Analysts at ICICI Securities said that the exit in these cities “indicates disenchantment with a long tail of sub-scale operations.”</li><li>The management said that although the demand environment remains challenging, they are seeing green shoots of demand coming back in the recent weeks.</li><li>Analysts say that the relaunch of <keyword id="4299597" type="General" weightage="20" keywordseo="zomato-gold" source="Orion">Zomato Gold</keyword> in January will boost business.</li></ul>Food delivery platform Zomato has ceased operations in 225 smaller cities as their performance was ‘not very encouraging’ in the past few quarters. This comes as the company reported a widening of losses in the October-December quarter. These cities contributed 0.3% to Zomato’s gross order value (GOV) in Q3FY23. The company said that, “Performance of these cities was not very encouraging in the past few quarters and we did not feel the payback period on our investments in these cities was acceptable.” Analysts at ICICI Securities said that the exit in these cities “indicates disenchantment with a long tail of sub-scale operations.” While the new-age company disappointed investors with more losses this quarter, the management said that although the demand environment remains challenging, they are seeing green shoots of demand coming back in recent weeks. The company believes that the worst may be behind it. “We believe that the long-term opportunity remains large and exciting. We think that the current slowdown is a result of a few temporary factors – a) macro slowdown for the mid-market segment, b) boom in dining out for the premium-end, and c) boom in travel at the premium-end,” said the company in an exchange filing. Zomato posted a loss of ₹347 crore in Q3 FY23 as compared to ₹63 crore loss in the same quarter last year. However, consolidated revenue from operations for the quarter surged 75% on year to ₹1,948 crore. Adding to it, this was the first quarter with consolidation of the grocery business Blinkit. The company informed exchanges that excluding the Blinkit business, Zomato turned positive at the EBITDA (earnings before interest, taxes, depreciation and amortisation) level in January even as the food delivery business witnessed a slowdown. ‘Relaunch of Zomato Gold to boost growth’ Zomato relaunched its membership programme, Zomato Gold in late January. This programme has been built on the lessons learned from the programme’s previous avatar and after taking in feedback from customers, restaurant partners, as well as investors. Analysts at Nuvama Institutional Equities said that the prospects for Zomato’s business going ahead remain bright while it assigned a ‘Buy’ on the stocks. “We believe that Zomato Gold’s relaunch will be a big boost to growth. Adj. EBITDA of ₹230 million (vs. ₹20 million in Q2FY23) in food delivery, despite flattish QoQ GOV growth is a big plus and we remain confident of the company’s ability to generate cash,” said the brokerage firm in a report. "We expect this programme to drive loyalty and higher frequency of ordering going forward, and in less than a month, the Zomato Gold programme has scaled to 900k+ members," said the company. Most brokerage houses have maintained a ‘Buy’ rating on the company’s stock. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerages </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Rating </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jefferies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maintains Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹100 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Morgan Stanley </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maintains Overweight </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹82 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Goldman Sachs </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maintains Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹100 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CLSA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maintains Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹70 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Citigroup </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maintains Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹76 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nomura </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Maintains Reduce </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹50 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Upgrade to Hold from Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹54 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nuvama Institutional Equities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹74 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Institutional Equities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Retains Buy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹82 </td></tr></tbody></table> Analysts believe Zomato may clock profitability as soon as by the end of the current financial year. “Zomato’s road to profitability has grown even more promising. Zomato (ex-quick commerce) clocked adj. EBITDA level profitability in the month of Jan-23. Depending on execution-related wins, the company (ex of quick commerce) may clock profitability in Q4FY23 itself, two quarters ahead of their guidance,” said a report by Nuvama Institutional Equities. Further, Zomato is planning to remodel the Zomato Instant service to focus on offering customers home-style cooked meals at affordable prices (to be called Zomato Everyday). “We believe that this is a large opportunity in a market like India and is relatively untapped currently. We plan to launch this soon in the next few weeks,” said the company. Shares of the company have dropped nearly 26% in the last three months. The stock price of Zomato was down 2.41% at ₹50.55 on February 14. <div type="image" title="zomato 3 mo" height="900" width="1200" msid="97907107" hostid="261" sizebytes="10362"></div> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/nykaas-stock-plunges-4-2-after-its-q3-net-profit-slips-70/articleshow/97901748.cms">Nykaa’s stock plunges 4.2% after its Q3 net profit slips 70%</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/gursaurabh-singh-asked-the-sharks-to-give-100-hours-of-their-time-for-0-5-equity/articleshow/97902173.cms">Startup that wants to give an EV twist to regular cycles seeks Sharks' time not money</a>

No long-tail effect: Zomato banks on demand recovery in future, even as it shuts operations in 225 cities on poor performance

<ul><li>Fintech companies like Paytm and PB Fintech have not only reported better than expected earnings but also narrowed their losses significantly.</li><li>While Zomato and Nykaa did not deliver overall improvement in financials, analysts still have high hopes for them.</li><li>Shares of Paytm rose nearly 22% from February 3 when it reported its quarterly earnings.</li><li>Analysts say the long-term growth potential of these companies is huge in spite of the short-term challenges.</li></ul>There’s no end to the woes of new age technology companies. They are in the spotlight yet again, after their mixed performance during the December quarter. Fintech companies like Paytm and PB Fintech have not only reported better than expected earnings but also narrowed their losses significantly. Zomato and Nykaa did not deliver overall improvement in financials, but analysts remain optimistic. Another new age company among talks is hyperlocal delivery startup Dunzo with elevated losses and massive valuation. Billionaire and chairperson of RPG Group highlighted the financials of the company <a href="https://twitter.com/hvgoenka/status/1625843597626183680">in a tweet </a>on February 15. “New age digital stocks are not doing great primarily because the market is not doing great. India is underperforming this year with a negative 2.34 % return YTD while markets like China, HongKong and South Korea are doing very well. When India’s underperformance changes, new age digital companies also will start performing. Some results from this segment are very good like Paytm. Zomato also has done reasonably well, but Nykaa’s results came below expectations,” said Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services. New age technology companies have been under the scanner because of the massive underperformance in their share prices due to elevated valuation. However, analysts believe that the long term bet on these companies is worth it despite several roadblocks. “The long-term growth potential of these companies is huge and, therefore, in spite of the short-term challenges, these stocks have buyers particularly after the sharp correction from their listing peak prices,” added Vijayakumar. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">New age companies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3 FY23 Profit/Loss </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3 FY22 Profit/Loss </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Paytm </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹392 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹779 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Zomato </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹347 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹63 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">PB Fintech (Policybazaar) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹87 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹298 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nykaa </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹8.2 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹27.9 crore </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Paytm’s first ever quarterly operating profit impresses, builds hope The fintech company’s December quarter performance was a big surprise for many as it posted its first ever quarterly operating profit as it narrowed down losses. The growth was driven by pick up in merchant subscription revenues and loan distribution. “Biggest surprise is distribution business, control of cashbacks, opex,” said Macquarie in a report. Shares of the company rose nearly 22% from February 3 when it reported its quarterly earnings. Macquarie has upgraded rating on the company’s stock to ‘Outperform’ from ‘Underperform’ with a target price of ₹800. “PayTM has positively surprised on the distribution of financial services revenue by a wide margin and has also managed to control overall expenses and charges. At the time of listing, profit and free cash flow were not even a part of management’s discussion. However, we see a very visible change in approach of management to deliver profit, evidenced, we believe, by the core EBIDTA profitability that was reported recently,” said Macquarie in a report. Zomato: A promising road to profitability Zomato reported better than expected Q3 FY23 revenues, and analysts believe it may reach profitability by the end of the current financial year. “Depending on execution-related wins, the company (ex of quick commerce) may clock profitability in Q4FY23 itself, two quarters ahead of their guidance,” said analysts at Nuvama Institutional Equities. “Zomato’s road to profitability has grown even more promising. Zomato (ex-quick commerce) clocked adj. EBITDA level profitability in the month of Jan-23. Depending on execution-related wins, the company (ex of quick commerce) may clock profitability in Q4FY23 itself, two quarters ahead of their guidance,” added the report. Analysts say Zomato’s relaunch of its Gold membership plan should bring growth back. Most brokerage houses have <a href="https://www.businessinsider.in/business/news/no-long-tail-effect-zomato-banks-on-demand-recovery-in-future-even-as-it-shuts-operations-in-225-cities-on-poor-performance/articleshow/97907071.cms">maintained a ‘Buy’ rating </a>on the company’s stock. “The fact that most of these companies have put forth their strategy to cut down losses and become profitable in the near future builds hope for investors. For example, Zomato’s decision to cut operations in 225 smaller cities. Moreover, since most of these <keyword id="10951575" type="General" weightage="20" keywordseo="new-age-tech-companies" source="Orion">new age tech companies</keyword> are direct consumer based there are expectations of inflation cooling down and boosting consumer spend.” Shrikant Chouhan, head of equity research (retail) at Kotak Securities told Business Insider India. Nykaa: Premium valuation reflects solid outlook, say analysts Nykaa, reported a 70% on year decline in net profit in Q3 <a href="https://www.businessinsider.in/business/corporates/news/nykaas-stock-plunges-4-2-after-its-q3-net-profit-slips-70/articleshow/97901748.cms">missing analysts expectations</a>. Despite this, brokerages believe the best is yet to come for the company. During a post-earnings conference call Falguni Nayar, executive chairperson, MD and CEO of Nykaa said that although inflationary pressures were present, it wasn’t that big of an issue for many of Nykaa’s customers. Q3 is considered to be a seasonal quarter for the company because of the festive season and despite macro challenges Nykaa’s growth was applauded by analysts. “In a quarter rampaged by a tougher macroeconomic environment, Nykaa reported substantial growth in Q3FY23 numbers,” said a report by JM Financial. The brokerage firm has assigned a ‘Buy’ rating on the stock. “We continue to see increased strength of the dominant positioning in beauty and personal care (BPC) vertical while the newcomer, fashion vertical, has gained market share at the cost of a sharp dip in contribution margin,” added the report. Nykaa’s EBITDA margins came under pressure and fell to 5.3% in Q3, as against 6.3% in the same period last year. “While we expect Nykaa’s GMV growth, at 35% in FY23E-25E, to be the highest within our global ecommerce coverage, we believe Nykaa’s valuation premium (FY24 EV/GMV of 3.1x vs 0.5x median for peers) already reflects this solid growth outlook and Nykaa’s stronger margin profile,” said a report by Goldman Sachs. The investment banker has assigned a ‘Neutral’ rating on the stock. PB Fintech on course to profitability soon The December quarter performance of PB Fintech, the parent company of Policybazaar and Paisabazaar, was another surprise for investors as the company narrowed its losses significantly. Its insurance premiums jumped 70.3% on year to ₹30.3 billion driven by a strong showing across segments. “Given its market share of 90%-plus in online insurance sales and a growing offline presence, PB is poised to post strong sales,” said analysts at Nuvama Institutional Equities. Further, the management expects revenue and margins to improve further as agent productivity rises and benefits of appointments channel are realised. They hinted at a sharp profitability uptick in Q4, say analysts. “This growth becomes even more impressive considering the seasonally weak Q3 for insurance, where new business premiums for life and general insurance declined QoQ by 19% and 12%, respectively,” said a report by JM Financial. New-age internet based businesses, like their unlisted peers, have been chalking out strategies that lead them towards profitability and are already on a growth path aided by their unique business propositions — allaying investor and analyst concerns. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/google-india-layoffs-nearly-500-people-fired/articleshow/98001522.cms">Google layoffs reach Indian shores, nearly 500 employees sacked late Thursday</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/thelife/personalities/news/neal-mohan-indian-american-guy-journey-to-becoming-youtube-ceo/slidelist/98001073.cms">From Lucknow to USA: Indian-American Neal Mohan’s journey to becoming YouTube CEO</a>

New age technology companies back in the spotlight after Q3 performance

<keyword id="6354427" type="General" weightage="100" keywordseo="apple" source="Orion">Apple</keyword> removed 1,474 apps from its <keyword id="115504" type="General" weightage="80" keywordseo="app-store" source="Orion">App Store</keyword> as per requests from various governments to take down such apps in 2022, including a massive 1,435 from mainland China and just 14 from <keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword>. According to the company's '2022 App Store Transparency Report', the Pakistan government requested to take down 10 apps while Russia asked to remove seven apps for violating various laws of the land. There were a total 18,412 appeals of app removals from various agencies worldwide (again led by China at 5,484), including 709 from India. Apple restored 24 apps in India after appeals of app removals last year. As of 2022, Apple had 1,783,232 apps in total on the App Store, according to the report. The tech giant reviewed 6,101,913 app submissions and rejected 1,679,694 last year for violating App Store policies. App submissions approved after rejection were 253,466 and total apps finally removed from the App Store were 186,195 in 2022. It was the first report published as part of the company's $100 million settlement with App Store developers in 2021. Category-wise, games (38,883), utilities (20,045) and business (16,997) topped the list of removed apps. Total number of registered Apple developers on the App Store was 36,974,015 while Apple terminated 428,487 developer accounts for violating its policies in 2022. "Since it launched in 2008, the App Store has proven to be a safe and trusted place to discover and <keyword id="8470804" type="General" weightage="50" keywordseo="download-apps" source="Orion">download apps</keyword>," according to Apple. Earlier this week, Apple announced that its App Store prevented over $2.09 billion in potentially fraudulent transactions in 2022, blocking nearly 3.9 million stolen credit cards from being used to make purchases, and banned 7,14,000 accounts from transacting again. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/zomato-net-loss-narrows-to-188-crore-in-q4-revenue-rises-70-yoy/articleshow/100358894.cms">Zomato net loss narrows to ₹188 crore in Q4, revenue rises 70% YoY</a> <a href="https://www.businessinsider.in/business/corporates/news/indigo-reports-a-net-profit-of-919-crore-in-q4-revenue-soars-76-yoy/articleshow/100331520.cms">IndiGo reports a net profit of ₹919 crore in Q4, revenue soars 76% YoY</a> <a href="https://www.businessinsider.in/finance/banks/news/sbi-q4-2022-23-results-indias-largest-lender-posts-highest-ever-quarterly-net-profit-of-16695-crore/articleshow/100327874.cms">SBI Q4 results: India’s largest lender posts record quarterly net profit of ₹16,695 crore, up 83% YoY</a>

Apple removed 1,474 apps on govt takedown requests in 2022, 14 from India

<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.

You Searched For "zomato q1" and got 7 results

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

BI India Bureau

Zomato and Swiggy increase platform fee by 20% – food deliveries to get costlier

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Zomato, Blinkit will cross-leverage each other's customer base soon, says Deepinder Goyal

IANS

No long-tail effect: Zomato banks on demand recovery in future, even as it shuts operations in 225 cities on poor performance

Bhakti Makwana

New age technology companies back in the spotlight after Q3 performance

Bhakti Makwana

Apple removed 1,474 apps on govt takedown requests in 2022, 14 from India

IANS

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

Katya Naidu

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