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Mint
12 hours ago
- Business
- Mint
India's Nifty 50: A royalty in valuations but commoner in returns
India's Nifty 50 might be wearing the crown when it comes to premium valuations in Asia, but its recent performance has been anything but royal. Despite its lofty valuation, the benchmark index of the National Stock Exchange has risen just about 1% over the last three months. Once regarded as a resilient outperformer in the region, the Nifty 50 has recently lost its edge, slipping into the underperformer bracket and trailing not only its Asian peers, but also several developed markets. According to Bloomberg data, the Nifty 50 is currently trading at a steep price-to-earnings ratio of 24.2 times, making it one of the priciest markets in Asia. For context, Japan's Nikkei is at 19x, Taiwan's Taiex at 19.2x, China's CSI 300 at 16.9x, South Korea's Kospi at 14.7x, and Hong Kong's Hang Seng is way lower at just 12.2x. Read more: NSDL IPO: Reasonable valuation, strong moat, and room to reclaim growth Having posted just a 1.2% gain in the past three months, Nifty is barely ahead of Malaysia's FTSE Bursa Malaysia KLCI, which rose 1%. In fact, Nifty has found itself at the bottom of the Asia pack, while peers like Japan's Nikkei, Taiwan's Taiex, and others mentioned above have surged between 8% and 26%, according to Bloomberg data. Even developed markets like the US' S&P 500 rose 15% in the past three months, while Germany's DAX is up 7%, the data showed. 'This should have been India's time to rally especially with the dollar losing strength and emerging market currencies gaining ground. But instead, the economic slowdown and expensive stock valuations are keeping foreign investors at bay," said Saurabh Mukherjea, founder and chief investment officer (CIO) at Marcellus Investment Managers. Beyond the weariness from persistent valuation concerns, a major factor behind the underperformance of Indian equities relative to other markets has been the lingering global economic uncertainty, said Nirav Karkera, head of research at Fisdom. 'There's growing uncertainty around the US economic direction and its monetary policy stance. At the same time, trade protectionism is quietly picking up across the globe, partly as a ripple effect of the US tariff actions. This mix is making global investors nervous," he added. Even with steady domestic inflows through systematic investment plans (SIPs), the Indian mutual fund industry continues to hold a sizeable cash pile, reflecting a cautious stance. At the same time, foreign investor confidence remains patchy, with their buying activity still lacking consistency. Since January, domestic institutional investors (DIIs) have consistently pumped money into equities every single month, with net purchases totaling a massive ₹4.04 trillion, according to BSE data. Foreign institutional investors (FIIs), on the other hand, have been far less predictable. After starting the year as net sellers, FIIs briefly turned buyers from March to June, only to return to the selling mode in July. Overall, FIIs have pulled out ₹1.28 trillion from Indian equities so far this year, as per NSDL data. Read more: Bulls and bears clash at 25,200: Will Nifty break free? Besides, market experts say this hesitation stems from subdued consumption trends, and a slower-than-expected earnings recovery – all of which are weighing on market sentiment and keeping capital at bay. Other weak spots The ongoing impasse in trade talks between the US and India remains a significant worry for investors, with no clear resolution in sight. This uncertainty adds to the overall discomfort in the market. The two sides remain in discussions over an interim trade agreement, as the 1 August deadline approaches. The date marks the end of the suspension period for tariffs—up to 26%—originally imposed by US President Donald Trump on several countries, including India. According to reports, a US delegation is scheduled to visit India on 25 August for the next round of talks on the trade deal. On the corporate front, while Q1 FY26 financial results have been a mixed bag, Karkera noted that the recovery in India Inc's earnings may be delayed by up to two quarters. 'Even the earnings of index heavyweights have struggled to captivate investors, which signals that the anticipated earnings growth might take longer to materialize than originally expected," he explained. The Nifty 50 has recorded single-digit profit growth for the last seven quarters, except in Q1 FY25, when it saw a de-growth of nearly 7%, Bloomberg data shows. For Q1 FY26, so far 25 companies in the index have reported their earnings, with an average profit growth of about 5% year-on-year. What would revive the momentum? 'Our economy has entered a cyclical downturn and the earnings growth has slowed over the last four quarters… it's not evident whether it will revive any time soon," said Mukherjea of Marcellus Investment Managers. Vinay Jaising, CIO and head of equity advisory at ASK Private Wealth, which manages over ₹44,000 crore in assets, highlighted a notable trend: while Indian equities have underperformed compared with the global markets, capital is still flowing into riskier assets such as US equities. He said even though the blue-chip or large-cap indices have remained flat over the past three months, the Nifty Smallcap 250 has gained nearly 11%, indicating that select investors are still chasing growth and higher-risk opportunities. Read more: Kotak Bank trades at a discount to top private peers. A key ratio reveals why 'What could potentially drive a sustained upward momentum in headline Indian equities is a recovery in earnings growth, especially in B2C (Consumption), which still appears to be one or two quarters away, and a revival in private capex, which is yet to reflect the benefits of recent interest rate cuts," Jaising added. Indian companies have been slow to ramp up capital expenditure, despite the Reserve Bank of India cutting policy rates by total 100 basis points since February, its first easing move in five years. The muted response reflects lingering caution. For the Indian markets to inch higher, 'we must maintain the earnings growth momentum," said Alok Singh, CIO at Bank of India MF. 'While there are concerns, such as muted revenue growth and lacklustre private capex, these do not warrant an immediate de-rating," Singh said. However, if these issues persist, a 'gradual de-rating" in valuations is likely over time, he added. The outlook for equity returns largely depends on a revival in consumption and a rebound in earnings growth, factors that could also help restore foreign investor confidence in Indian markets. Read more: FPIs struggle to shake off fears, bearish bets hit 4-month high
Time of India
03-07-2025
- Business
- Time of India
Sharp contrast! How Swiggy & Eternal, India's top e-commerce stocks, are outshining Chinese counterparts
Quick commerce is transforming India's digital retail sector. The growth stands in stark contrast to Chinese counterparts. (AI image) Swiggy and Eternal ( Zomato 's parent firm), India's leading Indian e-commerce stocks, have surpassed domestic indices and Asian counterparts - China included - in the previous month, with swift recovery driving speculation about their competitive edge and earnings potential. Quick commerce is transforming India's digital retail sector, with organisations competing in a market that Bloomberg Intelligence projects could reach $100 billion by 2030. The sector offers delivery of essential items including groceries and personal care products in approximately 10 minutes. Swiggy, Eternal Outshine Chinese Peers Swiggy Ltd. shares rose 20% in the past month, surpassing the NSE Nifty 100 Index, whilst Eternal Ltd. gained 11%. The surge in India's expanding quick-commerce sector, delivering everyday necessities within minutes, stands in stark contrast to Chinese counterparts, where aggressive pricing competition has affected food-delivery companies negatively. Despite Inc. and Walmart Inc.'s Flipkart India Pvt. entering the market, experts believe existing players Swiggy, Eternal, and privately-held Zepto will maintain their market positions, owing to their established supply chains and early market presence. "Established players have shown they can manage delivery costs effectively, especially in paying and utilizing riders efficiently," said Nirav Karkera, a fund manager and head of research at Fisdom. "New entrants, however, will still need to prove they can do this in a sustainable way," he told Bloomberg. Currently, Eternal's Blinkit , Swiggy's Instamart and Zepto jointly hold about 88% of India's quick-commerce market share, according to JM Financial Ltd. data. Since its 2022 acquisition by Eternal, which also owns food-delivery service Zomato, Blinkit has dominated the segment. In China's market landscape, the e-commerce delivery industry faces intense competitive pressures. Market leaders Meituan and Inc. have experienced a significant decline, with their combined market valuation dropping by more than $70 billion from March peak levels. India's Expanding E-Commerce Space Major e-commerce companies have made substantial investments to broaden their network of warehouses and "dark store" distribution centres across numerous cities. This expansion strategy, coupled with competitive pricing to attract customers, has impacted their profit margins. Also Read | US plans 'economic bunker buster' bill: Will Donald Trump impose 500% tariff on countries importing oil from Russia? How it may impact India The established companies are likely to reduce such expansive investments this year, enabling them to concentrate on improving profitability. Meanwhile, newer competitors must continue investing to establish their market presence. The leading companies are also enhancing revenue generation by promoting higher-value orders and introducing paid supplementary services. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like "내장지방만 쏙 빠집니다!" 신현재, 복부 똥뱃살 순식간에 녹여 신현재 중년 복부비만 개선 더 알아보기 Undo Digital retail platforms are increasing their minimum order requirements, implementing more strategic discount policies and concentrating on strengthening their financial performance, according to JM Financial analysts, including Swapnil Potdukhe, in their June 26 report. "Losses may have already peaked" for both Blinkit and Instamart, they noted. Challenges in Indian E-Commerce The Indian market presents ongoing difficulties. According to JM Financial's research, Zepto has gained substantial market share, primarily at Instamart's expense. Despite Swiggy's continued unprofitability, analyst confidence has grown, with the proportion of buy recommendations reaching its highest point since its late 2024 market debut. Also Read | Sensex zooms 12,000 points in just 3 months! Is the Rs 72 lakh crore stock market rally sustainable? Here's what investors should focus on Investment expert Karkera from Fisdom suggests that Zepto's anticipated stock market entry could redirect some investments away from Eternal and Swiggy. However, all companies are expected to benefit from the expanding market opportunities. "The incumbents continue to stretch their lead in users as well as in store networks, despite lowering discounts and levying delivery and handling fees," said Aditya Soman, an analyst at CLSA Ltd. "We remain positive on the quick-commerce opportunity. We believe there is enough room for the incumbents and a couple of new entrants." Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
03-07-2025
- Business
- Business Standard
India's e-commerce stocks outrun Chinese peers on profitability hopes
India's top e-commerce stocks have outpaced local indexes and regional peers over the past month, as a rapid rebound fuels bets on their ability to edge out rivals and boost profitability. Shares of Swiggy Ltd. climbed 20 per cent last month, topping the NSE Nifty 100 Index, while Eternal Ltd. advanced 11 per cent. The rally in India's fast-growing quick-commerce sector — which delivers daily essentials in just minutes — contrasts sharply with losses for counterparts in China, where a fierce price war has battered food-delivery firms. Even with new entrants including Inc. and Walmart Inc.'s Flipkart India Pvt., analysts say incumbents Swiggy, Eternal, and unlisted Zepto are likely to retain market share, thanks to their entrenched supplier networks and first-mover advantage. 'Established players have shown they can manage delivery costs effectively, especially in paying and utilizing riders efficiently,' said Nirav Karkera, a fund manager and head of research at Fisdom. 'New entrants, however, will still need to prove they can do this in a sustainable way,' he added. Quick commerce is reshaping India's online retail landscape, with companies racing to tap into a market that Bloomberg Intelligence estimates could reach $100 billion by 2030. The segment promises delivery of essentials like groceries of personal care items in as little as 10 minutes. For now, Eternal's Blinkit, Swiggy's Instamart and Zepto collectively control around 88 per cent of the quick-commerce market share in India, according to data compiled by JM Financial Ltd. Blinkit has led the segment since its 2022 acquisition by Eternal, which also owns food-delivery platform Zomato. Such costly expansion is expected to ease for the early movers this year, however, allowing them to focus on profitability while newer entrants still need to invest in order to gain share. Major players are also moving toward better monetization by incentivizing high-value purchases and charging fees for new related services. E-commerce platforms are raising average order sizes, applying more discipline to their discounts and increasingly focusing on improving their economics, JM Financial analysts including Swapnil Potdukhe wrote in a June 26 note. 'Losses may have already peaked' for both Blinkit and Instamart, they added. In China meanwhile, the e-commerce delivery sector continues to struggle with hostile competition. The leaders Meituan and Inc. have shed more than $70 billion in combined market value since March peaks. Challenges also remain in India. Inroads by Zepto have taken the most market share from Instamart, according to JM Financial's data. And Swiggy is still unprofitable, though analyst sentiment has been improving, with its ratio of analyst buy recommendations climbing to the highest since its late 2024 listing. Plans for an eventual stock market listing by Zepto may draw some investment allocations away from Eternal and Swiggy, according to Fisdom's Karkera. Nevertheless, they're all seen benefiting from expansion of a market that is still growing. 'The incumbents continue to stretch their lead in users as well as in store networks, despite lowering discounts and levying delivery and handling fees,' said Aditya Soman, an analyst at CLSA Ltd. 'We remain positive on the quick-commerce opportunity. We believe there is enough room for the incumbents and a couple of new entrants.'
Time of India
03-07-2025
- Business
- Time of India
India's e-commerce stocks Swiggy and Eternal outrun Chinese peers on profit hopes
India's top e-commerce stocks have outpaced local indexes and regional peers over the past month, as a rapid rebound fuels bets on their ability to edge out rivals and boost profitability. Shares of Swiggy Ltd. climbed 20% last month, topping the NSE Nifty 100 Index, while Eternal Ltd. advanced 11%. The rally in India's fast-growing quick-commerce sector — which delivers daily essentials in just minutes — contrasts sharply with losses for counterparts in China, where a fierce price war has battered food-delivery firms. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo Even with new entrants including Inc. and Walmart Inc.'s Flipkart India Pvt., analysts say incumbents Swiggy, Eternal, and unlisted Zepto are likely to retain market share, thanks to their entrenched supplier networks and first-mover advantage. 'Established players have shown they can manage delivery costs effectively, especially in paying and utilizing riders efficiently,' said Nirav Karkera, a fund manager and head of research at Fisdom. 'New entrants, however, will still need to prove they can do this in a sustainable way,' he added. Quick commerce is reshaping India's online retail landscape, with companies racing to tap into a market that Bloomberg Intelligence estimates could reach $100 billion by 2030. The segment promises delivery of essentials like groceries of personal care items in as little as 10 minutes. Live Events Bloomberg For now, Eternal's Blinkit, Swiggy's Instamart and Zepto collectively control around 88% of the quick-commerce market share in India, according to data compiled by JM Financial Ltd. Blinkit has led the segment since its 2022 acquisition by Eternal, which also owns food-delivery platform Zomato . These established businesses have invested heavily in expanding their warehouse and 'dark store' fulfillment-center networks to more and more cities. That's put pressure on profit margins along with price cuts intended to lure customers. Such costly expansion is expected to ease for the early movers this year, however, allowing them to focus on profitability while newer entrants still need to invest in order to gain share. Major players are also moving toward better monetization by incentivizing high-value purchases and charging fees for new related services. E-commerce platforms are raising average order sizes, applying more discipline to their discounts and increasingly focusing on improving their economics, JM Financial analysts including Swapnil Potdukhe wrote in a June 26 note. 'Losses may have already peaked' for both Blinkit and Instamart, they added. In China meanwhile, the e-commerce delivery sector continues to struggle with hostile competition. The leaders Meituan and Inc. have shed more than $70 billion in combined market value since March peaks. Bloomberg Challenges also remain in India. Inroads by Zepto have taken the most market share from Instamart, according to JM Financial's data. And Swiggy is still unprofitable, though analyst sentiment has been improving, with its ratio of analyst buy recommendations climbing to the highest since its late 2024 listing. Plans for an eventual stock market listing by Zepto may draw some investment allocations away from Eternal and Swiggy, according to Fisdom's Karkera. Nevertheless, they're all seen benefiting from expansion of a market that is still growing. 'The incumbents continue to stretch their lead in users as well as in store networks, despite lowering discounts and levying delivery and handling fees,' said Aditya Soman, an analyst at CLSA Ltd. 'We remain positive on the quick-commerce opportunity. We believe there is enough room for the incumbents and a couple of new entrants.'
Economic Times
03-07-2025
- Business
- Economic Times
India's e-commerce stocks Swiggy and Eternal outrun Chinese peers on profit hopes
Live Events Bloomberg Bloomberg (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel India's top e-commerce stocks have outpaced local indexes and regional peers over the past month, as a rapid rebound fuels bets on their ability to edge out rivals and boost of Swiggy Ltd. climbed 20% last month, topping the NSE Nifty 100 Index, while Eternal Ltd. advanced 11%. The rally in India's fast-growing quick-commerce sector — which delivers daily essentials in just minutes — contrasts sharply with losses for counterparts in China, where a fierce price war has battered food-delivery with new entrants including Inc. and Walmart Inc.'s Flipkart India Pvt., analysts say incumbents Swiggy, Eternal, and unlisted Zepto are likely to retain market share, thanks to their entrenched supplier networks and first-mover advantage.'Established players have shown they can manage delivery costs effectively, especially in paying and utilizing riders efficiently,' said Nirav Karkera, a fund manager and head of research at Fisdom. 'New entrants, however, will still need to prove they can do this in a sustainable way,' he commerce is reshaping India's online retail landscape, with companies racing to tap into a market that Bloomberg Intelligence estimates could reach $100 billion by 2030. The segment promises delivery of essentials like groceries of personal care items in as little as 10 now, Eternal's Blinkit, Swiggy's Instamart and Zepto collectively control around 88% of the quick-commerce market share in India, according to data compiled by JM Financial Ltd. Blinkit has led the segment since its 2022 acquisition by Eternal, which also owns food-delivery platform Zomato These established businesses have invested heavily in expanding their warehouse and 'dark store' fulfillment-center networks to more and more cities. That's put pressure on profit margins along with price cuts intended to lure costly expansion is expected to ease for the early movers this year, however, allowing them to focus on profitability while newer entrants still need to invest in order to gain share. Major players are also moving toward better monetization by incentivizing high-value purchases and charging fees for new related services.E-commerce platforms are raising average order sizes, applying more discipline to their discounts and increasingly focusing on improving their economics, JM Financial analysts including Swapnil Potdukhe wrote in a June 26 note. 'Losses may have already peaked' for both Blinkit and Instamart, they China meanwhile, the e-commerce delivery sector continues to struggle with hostile competition. The leaders Meituan and Inc. have shed more than $70 billion in combined market value since March also remain in India. Inroads by Zepto have taken the most market share from Instamart, according to JM Financial's data. And Swiggy is still unprofitable, though analyst sentiment has been improving, with its ratio of analyst buy recommendations climbing to the highest since its late 2024 for an eventual stock market listing by Zepto may draw some investment allocations away from Eternal and Swiggy, according to Fisdom's Karkera. Nevertheless, they're all seen benefiting from expansion of a market that is still growing.'The incumbents continue to stretch their lead in users as well as in store networks, despite lowering discounts and levying delivery and handling fees,' said Aditya Soman, an analyst at CLSA Ltd. 'We remain positive on the quick-commerce opportunity. We believe there is enough room for the incumbents and a couple of new entrants.'
