Do you think that loss-making unicorns will be able to keep up the momentum on Dalal Street after listing?
The kind of response that Zomato and other companies have seen in the primary market shows that there is a huge amount of optimism. We would like to see how the business evolves, how pricing changes and when they can achieve profitability. At least for now, it looks like there is a huge momentum and interest in some of these players given the low penetration. There is a huge expectation that the growth can be sustained based on the technology that they are using. We saw Jubilant Foodworks talking about getting into food tech. Look at the interest that is generated in the stock. It (Zomato) is at the forefront of technology and penetration is still low. At least in the near term, there is a huge demand for a company like Zomato. It should do well.
What is it that the market is going to be eyeing out for in Reliance’s quarterly results?
In their AGM,
spelt out a lot of plans but the deadlines and details of the investments were missing. One big takeaway for me from the AGM was that two years back they said that they are going to be a net debt-free company and now they have come out with huge capex plans. It comes with an overhang of a huge debt.
In the results, the oil-to-chemicals segment is likely to be better in terms of performance. Jio’s subscriber numbers improved last month but have been underperforming the market to some extent. Retail is where the numbers were good, but they will get impacted in this quarter because of lockdowns. The key focus for this quarter would be the core petrochemicals and oil business.
What is your outlook on the market in the near term?
Our market has been driven by what is happening globally. Somehow on every dip, buying is emerging at lower levels. You can say that the follow-up is missing at higher levels. People are willing to buy and are waiting for opportunities during a dip. We have seen that the action has largely moved away from largecaps to the broader markets. The action is in midcaps, smallcaps and there are stock-specific actions. I think that should continue for a while. The result season is here. We saw how stocks are reacting to results, to management commentaries and IPOs. They (IPOs) are giving traction or momentum to stocks and sectors that are related. For example, Zomato is having a big positive impact on a lot of these QSRs that are listed. Plus, you had the results of Jubilant FoodWorks and the positive commentary from them is making that space very interesting.
If you look at the QSR segment, it is at an inflection point in India. Covid-related lockdowns are now behind. Things have opened up. In the second phase, we saw that they were allowed to open and deliver food at home, although restaurants were closed. QSR is the best place to benefit from this. People are now used to placing orders through digital. At the forefront are two companies — Jubilant FoodWorks as well as Burger King. We are very positive on both. It looks like a very long haul game there.
