With earnings season all set to kick off from Monday, brokerages are out with their quarterly projections for the quarter. Forecasts for a few new-age companies such as One-97 Communications (Paytm), Zomato, PB Fintech (Policybazaar) and FSN E-Commerce Ventures (Nykaa) suggest improved business momentum for the new-age companies, whose shares were buzzing all through 2022. This is what brokerages said on the four companies:
FSN E-Commerce Ventures(Nykaa)
JM Financial said the December quarter growth for Nykaa will be led by the festive demand during holiday season, penetration in new channels and newer initiatives (eB2B superstore).
While there has been a tougher macro environment, it expects Nykaa BPC to still do well due to the relative inelasticity of Nykaa shoppers. Nykaa Fashion, however, might still not see market share gains due to heightened competitive intensity but can still deliver decent growth on the small base.
“We anticipate Nykaa to deliver 29 per cent YoY growth in GMV and 26 per cent YoY growth in revenue led by strong growth in fashion and new initiatives. With BPC business delivering strong operating leverage and company-wide lowering of fulfilment costs from regional centres, we expect overall Ebitda margin to improve 152 bps sequentially and 21 bps YoY,” JM Financial said.
JM Financial said the company continues to expand omni-channel presence and its focus on new initiatives such as eB2B, which it believes will provide a significant opportunity over the next 3-5 years.
One 97 Communications (Paytm)
ICICI Securities in a report expects Paytm to report 46 per cent year-on-year (YoY) rise in revenues at Rs 2,125.70 crore compared with Rs 1,456.10 crore in the year-ago quarter. It sees Ebitda loss declining to Rs 488.10 crore from Rs 537.80 crore in September and Rs 787.90 crore in the December quarter last year.
Paytm had in its monthly update reported Rs 2.3 lakh crore GMV for two months ended November 30, 2022. Assuming slight increase monthly run rate of Rs1.1 lakh crore, ICICI Securities has estimated 10 per cent QoQ growth in GMV to Rs 3.5 lakh crore. Paytm also reported average MTU of 8.4 crore. Also, 68 lakh of loans and Rs 6300 crore value of loans disbursed through its platform during two months ended November 2022.
“With increasing GMV and lending business along with some increase in commerce and business, we estimate 11 per cent QoQ operating revenue growth. With management’s focus on improving its operating profitability, we expect its some direct expenses to decline sequentially and employee expenses (excluding ESOP) to be more or less flat which should improve its adjusted Ebitda,” ICICI Securities.
Zomato
JM Financial expects only 1 per cent QoQ growth in food delivery GOV in the December quarter as it factors in adverse impact of inflationary pressures on discretionary spends, increase in dine-in consumption and discontinuation of Zomato Pro Plus loyalty programme.
On the other hand, Blinkit GOV should at least see low-teens QoQ growth due to improvement in order throughput of dark stores.
“We also expect strong growth in Hyperpure business (11 QoQ) due to continued focus on expansion while dining-out business is likely to remain weak due to recent product revamp and discontinuation of delivery services to Talabat in UAE. Despite pressures on GOV growth, we expect food delivery business contribution margin to remain stable at 4.6 per cent (4.5 per cent in 2Q) while Blinkit business contribution margin should report sequential improvement due to lower per order operating costs,” it said.
JM Financial said the full quarter impact of the consolidation of Blinkit business will have an adverse impact on consolidated Ebitda loss per cent. It sees the Ebitda at minus 15.4 per cent against minus 11.6 per cent in September.
“Ex-Blinkit, we expect core business adjusted Ebitda loss per cent to decline to minus 1.7 per cent versus minus 4 per cent in Q2,” it said.
PB Fintech (Policybazaar)
JM Financial expects PB Fintech to deliver 44 per cent growth in insurance premium and 59 per cent YoY growth in loan disbursals while it expects while it expects the revenue for Paisabazaar to grow at 71 YoY and Policybazaar to grow at 59 per cent due to base effect and continued rise in insurance and credit penetration.
“We expect Policybazaar core online business premium to grow marginally while the offline business premium could be flat due to a stronger focus on profitability over growth. This should drive adj. EBITDA margin improvement of 130 bps over 2QFY23 to reach minus 7.7 per cent. We anticipate core Policybazaar vertical to show improvement in contribution margin driven by better conversions through omni-channel customer support,” it said.
JM Financial said the recent changes by IRDAI on commission cap are very positive for insurance distributors and the company stands to benefit from this tailwind.
