Zomato’s management in its earnings press release proclaimed “we love bad news at Zomato” as a management philosophy. We mean, really?
While the company’s comment was highlighting how it used the bad news of being tagged the worst employer in the gig economy into motivation to improve its human resource management, investors read it in an entirely different way.
Investors interpreted the company’s tagline to mean that the widening consolidated net loss in the June quarter on a year-on-year basis was good news. Shares of the company jumped 9.3 per cent on a day of weakness across the market.
Jokes aside, we all know in bull markets, bottom lines don’t matter. Everything is about the topline and Zomato’s 26 per cent topline growth was
for a quarter that was affected by the second wave of the pandemic. Brokerage firm UBS Securities was particularly impressed and so was Jefferies India.
Going by investors’ reaction to the company’s June quarter earnings, Deepinder Goyal will hope the bad news keeps rolling in.
SeQuent’s governance troubles
Investors of today realized reality is not as sweet as it seemed after the 77 per cent gains its stock has delivered over the past 12 months.
Shares of the pharmaceutical company nosedived 15 per cent today as corporate governance issues were brought to investors’ attention when the company declared its June quarter earnings on Tuesday.
The company, backed by private equity giant Carlyle, said that it has had to restate its revenues of the previous few quarters because of flouting of Group’s accounting policies regarding sales and modification of documents relating to revenue recognition.
Curiously, the company had already made the disclosure in the March quarter earnings but investors turned their back on the issue as earnings were too good to be ignored. With June quarter earnings disappointing on all fronts, corporate governance issues were seen in graver light by investors.
Metals get a lift from Biden
The metal sector stood tall amid the carnage in some segments of the stock market today with the Nifty Metal index surging over 3 per cent.
The gains in the sector were all thanks to the US President Joe Biden and his multi-trillion dollar infrastructure bill that promises to spend billions of dollars in revamping old infrastructure of the world’s largest economy.
With China focused on shrinking its commodity industry to meet emission targets, Indian companies may benefit from the likely surge in export demand going ahead for various metals as the US undergoes its biggest infra revamp in half a century.
