As the financial landscape evolves, brokerage firm JM Financial has released its insights for Q4 FY25, shedding light on the diverse performance trends within the internet sector. This quarter, we can expect significant variations across different segments, influenced by unique market dynamics. While food delivery giants like Eternal (Zomato) and Swiggy may face a slowdown, the quick commerce sector is gearing up for explosive growth, driven by the rapid expansion of dark stores.

Food Delivery Insights: Eternal and Swiggy

The food delivery market is poised for a mixed bag of results. Eternal is forecasted to see a decline in EBITDA, dropping from ₹1.6 billion in Q3 to just ₹0.6 billion in Q4. Similarly, Swiggy is expected to report losses of ₹8.55 billion in EBITDA, a significant increase from the previous quarter’s losses.

• Eternal Performance:

  • Q4 EBITDA: ₹0.6 billion
  • Q3 EBITDA: ₹1.6 billion
  • Projected PAT: ₹7 million (down from ₹590 million)
• Swiggy Performance:
  • Projected EBITDA Loss: ₹8.55 billion
  • Projected PAT Loss: ₹9.25 billion

Quick Commerce Growth and Challenges

The quick commerce sector is anticipated to thrive, thanks in part to aggressive dark store expansions. However, Eternal and Swiggy may face margin pressures due to the intensified competition and ongoing store openings. The outlook for this segment remains cautious as market dynamics continue to shift.

Nykaa’s Steady Ascent

In contrast, Nykaa is showcasing resilience in its Beauty and Personal Care segment, with a projected 27% year-over-year growth in gross merchandise value (GMV). Despite a slight dip from the previous quarter, the overall profitability remains intact, especially within its core BPC segment.

• Nykaa Highlights:
  • Year-over-Year GMV Growth: 27%
  • Previous Quarter Decline: 9.8%

FirstCry and Recruitment Services

FirstCry is expected to maintain a subdued performance, particularly in its international operations, while focusing on cost management. On the other hand, Info Edge is reporting strong growth in its recruitment services, particularly through platforms like 99acres, showcasing a robust demand for talent acquisition amid economic fluctuations.

Projections for Paytm and CarTrade

Looking ahead, Paytm is set to experience a stable quarter, with revenue projected to rise by 8% compared to the previous quarter. The company is benefiting from an increase in merchant loans, leading to improved margins. In a similar vein, CarTrade anticipates a significant year-over-year growth with enhancements in its profit margins.

Travel Technology Performance

In the travel technology arena, TBO Tek may encounter challenges due to seasonal factors like Ramadan, which could slow growth. Conversely, Ixigo is expected to capitalize on the Kumbh festivities, leading to a successful quarter across all its segments.

Delhivery’s Strategic Moves

Delhivery continues to face hurdles in its express parcel division, impacted by the scaling of competitors like Valmo. Nevertheless, the acquisition of Ecom Express could offer a much-needed boost to its operations. Meanwhile, Blackbuck is poised for steady growth, with expectations of improved margins.

Conclusion: A Look Ahead

As we approach the end of Q4 FY25, the internet sector presents a mix of challenges and opportunities. The recent market corrections have made several companies more attractive for investors, particularly Delhivery and Paytm. With diverse performance indicators and strategic moves, stakeholders should keep a vigilant eye on these market players as they navigate their paths forward.

For those interested in the broader financial implications, consider checking out our analysis on HDFC Bank vs IDFC First Bank vs Yes Bank to find out which stocks might be worth your investment ahead of the Q4 results.