Tale of the Tape 

Hi ya’ll. Happy Friday!

Markets were super choppy with the Nifty dropping over 300 points from the day’s high before recovering some to close flat. Midcaps (-0.8%) saw deep cuts while Smallcaps ended barely unchanged. The advance-decline ratio was in favour of the bears (3:2).

It was a mixed-bag kinda day for sectors. Oil & Gas (+0.7%) was the top gainer, followed by IT (+0.3%). Metals (-0.7%) and Pharma (-0.7%) saw the most selling pressure.

Zomato is throwing profitability out the window as it faces fierce competition. Read our top story on the challenges it's facing.

JSW Steel (-6%) was the top Nifty loser after the Supreme Court ruling on Bhushan Steel & Power. Meanwhile, Adani Ports rallied +4% on strong Q4 results + robust management commentary. More details below.

TVS Motor (+1%) became the top electric-scooter firm, beating out Ola. Meanwhile, Bajaj Auto cracked -3% after domestic sales fell -11% YoY.

PNB Housing Finance was up +4% after 1.73 cr shares traded hands in a big block deal. Reports say Carlyle was the likely seller.

Q4 reactions. Railtel jumped +8% after posting a +46% YoY net profit surge. Godrej Properties was up +4% after its revenue grew +49% YoY.

V-Mart Retail approved a 3:1 bonus issue. Shareholders will receive 3 bonus shares for every share held.

IndusInd Bank rose +3% intraday after receiving the cleanchit from SEBI on allegations of insider trading.

Earnings
Eternal aka Zomato Q4 Review

Is Eternal aka Zomato heading back to square one? After becoming profitable, the delivery app is in a race to the bottom once again. ICYMI - we’ve warned you about this before. Stiff competition = higher investment & discounts = bad news.

But its Q4 results offered the first glimpse of what’s happening. Zomato’s profit dropped a whopping -78% YoY. Most of this was because Blinkit’s adjusted EBITDA loss jumped +5x YoY to hit Rs 178 cr.  But there’s also more to worry about.

1) Food delivery GOV growth is slowing down (+16% vs Zomato’s projection of +20% YoY). CEO Deepinder Goyal says there are three reasons for this: Firstly, overall sluggish demand. Secondly, a shortage of delivery partners because most are being used for quick commerce. Lastly, quick commerce itself is cannibalizing food delivery; if you order three bags of chips and a Coke on Blinkit at 11 AM, you may skip ordering lunch. 

2) Quick commerce is a death race again. Blinkit opened 294 dark stores in Q4, the most it ever has in a single quarter. This partly led to its average order value drop to Rs 665 vs Rs 707 QoQ. PS - roughly 40% of its total store network was “underutilised”.

3) Failed experiments continue to eat up money. The app shut down both ‘Zomato Quick’ (its 15-min food delivery service) and Zomato Everyday (homely meals) after figuring out there was no demand for them. Also, while its ‘Going Out’ and ‘B2B’ verticals saw a topline bump, losses continued to pile up.

Big Picture: All of Zomato’s engines are facing MAJOR headwinds right now. Unfortunately that means MORE cash burn. As CFO Akshant Goyal said: “We will aggressively look to grow our market share, especially in the face of heightened competition, and will not let any short-term profitability goals come in the way of that.” This isn’t 100% awful -- after all, it’s better than losing market share -- but it’s why Zomato was hit by a bunch of target price cuts.

Specials
Stocks To Buy In This Pullback

Looking for the best stocks to buy in May 2025?

We’ve compiled a list of the top 5 Mid & Small Cap stocks recommended by SEBI RAs on Stocktwits to buy right now.