What’s popular during festive season sales; What IPO valuation means to Swiggy

Hello,

Happy Diwali!

There’s nothing like receiving a gift from your employer on Diwali. India Inc has reportedly upped the gifting budgets, and corporates are tying up with online portals to curate customised gifts for employees.

However, not all companies are the same.  

ICYMI: Here’s the significance behind the special one-hour Diwali Muhurat trading.

Meanwhile, startups are celebrating after earnings jumped from previous years.

Tiger Global-backed digital lender MoneyView‘s revenue rose sharply 75% YoY to Rs 1,012 crore. Also, fintech Credgenics turned profitable with its parent boosting revenue by 72% YoY, boosted by increasing adoption of digital debt collection and resolution tools across the financial sector.

EV enabler BatterySmart too nearly tripled its revenue to Rs 164.6 crore from Rs 56 crore a year earlier. However, its losses also more than doubled, bogged down by a rise in battery swapping and support costs and employee benefit expenses.

Moving on, while the stock market is still weathering the exit of FPOs, a relatively unknown stock has gained the title of the most expensive stock.

With a value of Rs 2,36,250 per share, Elcid Investments has dethroned MRF to become the most expensive stock. However, just a few months ago, on June 21, it was trading at just Rs 3.53 per share. 

Now that’s a meteoric rise.

In today’s newsletter, we will talk about 

• Inside festive season sales trends
• What IPO valuation means to Swiggy
• Meesho on the verge of profitability

Here’s your trivia for today: How many days does Diwali last?

In-depth

Inside festive season sales trends

The first wave of the festive season sales kicked off in the last week of September, with major ecommerce platforms unveiling flashy discounts and offers. Traditionally, sales before Navratri are muted, however, the trend seems to be slowly shifting.

“While previously sales started with the commencement of Navratri festivities, the trend has shifted towards launching sales a few days earlier, with sales then continuing through the festive season till Diwali and beyond,” Unicommerce said in a statement to YourStory. 

Ecommerce sales:

• Walmart-owned Flipkart managed to clock 33 crore user visits during early access and day 1 of its Big Billion Days festive sale. It noticed a growing demand for mobile phones, electronics, large appliances, fashion and beauty products.
• During the first set of sales, fashion emerged as the top category, driven by ethnic wear. Daily wear jewellery and kids’ fashion witnessed notable growth, particularly helped by traction from Tier II cities, according to strategy consulting firm Redseer. 
• Industry watchers expect festive sales in the offline markets to shift towards quick commerce platforms in the near future. “Customers have much bigger confidence in getting their grocery needs serviced quickly while being at home,” notes Bank of America. 

Foodtech

What IPO valuation means to Swiggy

In a press conference, Swiggy leadership said the valuation for its upcoming IPO is derived from a comprehensive institutional roadshow and a deep focus on “strategic moats”. Rohit Kapoor, CEO of Swiggy Food Marketplace, elaborated that the IPO pricing is meant to be “attractive” to encourage robust participation from investors.

The company’s strategic moat is built on its diverse service offerings, high customer engagement, and strong user retention, he noted.

Up and up:

• Swiggy disclosed that its food delivery business achieved a positive adjusted EBITDA of 0.8% in Q1 FY25, while its quick commerce segment has shown significant improvement in contribution margins, moving from -23% in FY23 to -3% in Q1 FY25.
• Swiggy expects Instamart to soon outpace its core food delivery business. Quick commerce has reached 40% of Swiggy’s food delivery business in terms of gross order volumes.
• With the IPO, some of its early investors like Accel and Elevation Capital will see over 3,300% gain on their investments as they will be selling part of their share in the issue. Norwest Venture Partners may see a gain of 2,531% in the IPO and receive Rs 250 crore.

Earnings

Meesho cuts losses by 97%

Bengaluru-based ecommerce platform Meesho has reported a 33% growth in revenue from its operations for the fiscal year 2023-24, reaching Rs 7,615 crore compared with Rs 5,735 crore in the previous year. It narrowed its adjusted losses by 97% to Rs 53 crore in FY24 from Rs 1,569 crore in the previous fiscal.

Key takeaways:

• Driven by a 36% surge in order volume, the company saw its high demand in categories like home and kitchen, beauty and personal care, and baby essentials.
• The firm attributed the improvement in losses to organic growth and operational efficiencies, particularly in logistics, bolstered by its own logistics arm, Valmo Logistics.
• Meesho completed its largest ESOP buyback programme worth Rs 200 crore ($25 million) in March.

News & updates

• Ad boost: Shares of online ad sellers surged on Wednesday as strong earnings from Google parent Alphabet, Reddit and Snap signalled solid spending from brands ahead of the crucial holiday season. The three companies were set to add around $140 billion combined to their market caps.
• New king: Chinese electric vehicle manufacturer BYD overtook Tesla in quarterly revenue for the first time as an electric vehicle maker. In the third quarter of 2024, BYD posted revenue of 201.1 billion yuan ($28.24 billion), marking a 24% year-on-year growth.
• Above water: Reddit just turned a profit for the first time. As part of its third-quarter earnings results, the company reported a profit of $29.9 million, along with $348.4 million in revenue—a 68% increase year over year.

How many days does Diwali last?

Answer: Five. The festival begins two days before the new moon on Dhanteras and ends on Bhai Dooj.

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