Q1FY24 result preview: Zomato, Nykaa, other new-age tech stocks may see decent revenue growth, improved EBITDA

livemint.com:

Zomato, Nykaa, Delhivery, among others are likely to see decent revenue growth with improvement in operational performance during the first quarter of FY24. The strong growth trajectory seen in the B2B e-commerce space is likely to continue in Q1FY24 driven by market share gains from offline segments and penetration increase as small businesses explore means of increasing their digital footprint on both supply and demand sides, analysts said.

The consumption slowdown seen in the March quarter continued in the June quarter in most B2C consumption categories due to sustained consumer inflation and its impact on disposable income as ‘return to office’ continues to be implemented across the country.  However, according to ICICI Securities, online commerce seems to be faring better than offline. “In our view, this trend was clearly visible in both ‘fashion’ and ‘consumer foodservice’.

While most apparel retailers were struggling to grow in Q1FY24, Nykaa managed to grow its fashion revenues by 11% YoY. Similarly, Zomato’s GOV growth by 6.8% QoQ (9.2% YoY) in Q1FY24E is likely to outpace most QSRs on a like to like basis," ICICI Securities said in a report.

Both these data points indicate possible market share gains for online versus offline, which is in contrast to the trend that was playing out over the last 2-3 quarters. Zomato: Zomato’s adjusted revenue growth is expected to be 10.2% QoQ and 47% YoY and overall adjusted EBITDA margin to improve to -3.9% as a proportion of adjusted revenue versus -7.2% in Q4FY23.