Paytm, Zomato, Swiggy, Nykaa, PB Fintech, IndiaMart, Just Dial: Q4 results preview

With earnings season kicking off, all eyes are on results of internet space firms such as One 97 Communications (Paytm), Eternal Ltd (Zomato), Swiggy Ltd, Nykaa Ltd, PB Fintech Ltd, Indiamart Intermesh Ltd and Just Dial Ltd , among others.

JM Financial believes food delivery growth for Eternal (Zomato) and Swiggy may moderate in Q4, but the robust expansion of dark stores is likely to support strong growth in the quick commerce (QC) segment.

Similarly, although food delivery margins are projected to improve, heightened competitive intensity and continued store expansion may exert pressure on QC margins, JM Financial said.

The domestic brokerage said Nykaa’s Beauty and Personal Care (BPC) segment probably maintained its growth momentum and that the Fashion segment showed marginal improvement, highlighting continued profitability.

Info Edge, JM Financial said, reported strong billings growth across its recruitment platform, 99acres, and other verticals. But PB Fintech’s new business premium growth is expected to normalise due to a slowdown in ULIPs. Its renewal premiums are likely to sustain momentum, JM Financial said.

Paytm is expected to report a relatively flat quarter sequentially, with an increasing share of merchant loans and operating leverage contributing to margin improvement, JM Financial said.

Eternal

Thanks to higher losses in Blinkit, Zomato is expected to report 98.8 per cent drop in profit at Rs 70 lakh from Rs 175.30 crore YoY. Gross order value (GOV) is seen rising 50.8 per cent YoY to Rs 18,797.50 crore from Rs 12,466 crore. In the case of Blinkit, take-rates are seen coming down a bit to 17.7 per cent due to increasing share of low margin products in product mix and lower delivery fees. Contribution margin may contract to 2 per cent (as % of GOV) against 3 per cent in 3Q, JM said.

Swiggy

Swiggy is seen reporting a widening of losses to Rs 925.10 crore from Rs 802.50 crore in Q3 and Rs 529.80 crore YoY. Gross order value (GOV) is seen rising 42.10 per cent YoY to Rs 12,179.70 crore from Rs 8,569 crore YoY. In the case of In Instamart, JM expects sequential GOV growth of 24.7 per cent (109.7 per cent YoY). Take-rates are likely to expand 37 bps sequentially to 15.8 per cent, mainly due to increase in ad income. Contribution margin are seen contracting to minus 5.8 per cent (as % of GOV) versus minus 4.6 per cent in Q3, due to aggressive dark store expansion and impact of high competitive landscape.

Paytm

On consolidated basis, revenue (including Rs 100 crore UPI incentives) is expected to grow 8 per cent QoQ. Contribution margin is expected to expand by 370bps QoQ due to increasing share of financial services in the mix (via higher take-rates on DLG model). Better operating leverage due to lower employee cost will lead Paytm turning adjusted Ebitda positive, excluding UPI incentives, JM said.

"We expect the company to turn PAT positive in 4Q with a PAT of Rs 4.5 crore. Any updates on the three regulatory triggers and increasing customer acquisition would be keenly watched," JM said.

PB Fintech

JM expects a normalised growth trajectory for PB Fintech, with 43 per cent YoY growth in insurance premium (against 53 per cent growth in 9MFY25, driven by 41 per cent/49 per cent YoY growth in core insurance premium/new initiatives.

"However, we expect contribution margins to have bottomed out as renewals rise in mix, though health segment still continues to rise in new business premium mix. Paisabazaar disbursals are expected to decline 16 per cent YoY with muted environment in unsecured loans while secured loans (via agency channel) might compensate for this dip," JM said.

JM expects revenue growth of 43 per cent YoY (up 21 per cent QoQ), driven by 48 per cent/11 per cent YoY growth in Policybazaar/Paisabazaar. Group contribution margin is seen rising 20 bps QoQ to 25.8 per cent (down 190 bps YoY), with core CM expected to benefit from renewals kicking in on a sequential basis.

The management commentary around healthcare foray and expectations on contribution margins trends going forward will be keenly watched.

Nykaa

For Nykaa, Q4 profit is seen at Rs 15.90 crore, up 129.3 per cent YoY. Nykaa reported low-thirties YoY growth in BPC segment surprising positively for the second quarter in a row. JM triangulated core BPC GMV growth at 28 per cent YoY, assuming eB2B and Nykaa Man GMV growth at 55 per cent. Net revenue growth is expected to be lower at 16 per cent, due to the weaker performance of Nykaa’s owned fashion brands and reduced content related activity in Q4FY25, which typically peaks during the festive-led Q3.

"With overall contribution profit expected to rise 22 per cent YoY costs below CM unlikely to rise commensurably, we expect 30 bps YoY Ebitda margin expansion (30 bps decline sequentially), reaching 5.9%. Management’s commentary on industry trends in BPC/Fashion, competitive landscape, continued supply chain investments and international expansion plans should be keenly watched," it said.

Info Edge

JM said Q4 is seasonally a very strong quarter for the recruitment business, leading it to believe that the trend improvement, as per recent filing, was led by a mix of strong renewal demand and unique client additions. The brokerage forecast Ebitda margin to expand by 309 bps YoY to 43.7 per cent against 43.1 per cent in Q3FY25. The brokerage sees forecast Ebitda and adjusted PAT growth of 27 per cent and 31 per cent, respectively. The management commentary on demand environment in IT and non IT recruitment, 99acres/Jeevansathi path to operating profit break-even will be keenly watched.

Just Dial

JM Financial expects 8.3 per cent YoY revenue growth for Just Dial, supported by 4 per cent YoY and 3 per cent YoY jump in paid campaigns (period-end) and average realisations, respectively. Collections growth is expected to be 7 per cent YoY in 4Q.

"We forecast sequential addition of 7,700 in paid campaigns from 16,700/2,600 in 4QFY24/3QFY25. Improving productivity of the sales team, tight control over A&P spends and declining investments towards new initiatives should lead to 228 bps YoY Ebitda margin expansion," JM said.

It sees PAT for Just Dial growing 40 per cent YoY at Rs 140 crore, led by improvement in operating performance.