Patanjali Foods, an Indian fast-moving consumer goods company, reported a 19.55% decline in its net profit to INR 216.54 crore for the quarter ending on December 31, 2023. This marks a decrease from the INR 269.18 crore net profit reported during the same period in the previous year.
Nonetheless, there was a marginal increase of 0.2 percent in the company’s net sales, amounting to INR 7,910.70 crore compared to INR 7,926.64 crore in the corresponding period of the previous year.
“The Food and Fast-Moving Consumer Goods (FMCG) segment achieved the highest quarterly revenue of INR 2,498.62 crore in the third quarter, achieving a growth of 64.05 per cent. The Food & FMCG segment accounted for 31.59 per cent of total revenue from operations in the current quarter,” the company said in an earnings release.
At the same time, revenue from the edible oils segment also experienced a decline of 15.33 percent, falling to INR 5,482.64 crore in the quarter.
“In the third quarter, revenue from exports increased by 49.02 per cent to INR 62.06 crore over the previous quarter. The company has been able to add new markets in line with its strategy to expand geographies,” it added.
The company also doubled its advertisement spends in the third quarter to INR 28.53 crore, as stated in the earnings release.
Nestle, a leading FMCG company, is expanding its manufacturing capabilities and operations in India. According to Suresh Narayanan, the Chairman and Managing Director of Nestle India, the company will invest between INR 6,000 to 6,500 crore from 2020 to 2025 to cater to the increasing demand. He mentioned that Nestle India had invested INR 7,000 crore from its inception to 2020, but the investment in the past five years has surpassed that of the previous 20-25 years.
Earlier, Nestle India had announced plans to invest INR 2,000 crore between the years 2000 to 2020. Subsequently, in 2022, it disclosed another significant investment of INR 5,000 crore for expansion, set to be completed by 2025.
“So if you take out the common years in the middle of the investment, the net investment would have been about INR 5,800 crores. We are well on that track. I think INR 3,200 crore has already been invested between 2020 and 2023,” said Narayanan.
Nestle India, renowned for its popular brands like Maggi, Nescafe, and KitKat, is establishing its tenth factory in Orissa. Additionally, it is enhancing production capacities for prepared dishes, particularly the Maggi range, doubling its coffee business, expanding chocolate lines, and boosting investment in distribution chains.
“By 2025, we might be recording almost INR 6,000 crore to INR 6,500 crore investments that we would have put since 2020,” he said adding this indicates “underlying robustness of demand for our products” but also the “commitment to the making India” philosophy, he added.
In 2023, Nestle’s sales surpassed the INR 19,000 crore mark. Presently, India ranks among the top ten markets for the Swiss multinational company, Nestle SA.
“We have some strong hefts in some of the business. We are ranked very well globally. I think the outlook on India is very, very positive. And there is a lot of Equity goodwill support,” he said.
Although Narayan refrained from disclosing specific future figures, he expressed his satisfaction with Nestle India’s sustained growth trajectory and indicated his optimism for its continued progress.
“If you look at our 2016 to 2022 performance, it has been around 11 to 12 per cent Y-o-Y growth and slightly higher on profitability. If I am able to deliver that on a larger base, that will be a good objective,” he said.
Regarding the demand landscape, Narayanan highlighted that the urban market has experienced significant expansion, particularly showing a robust preference for certain products. Additionally, smaller markets in tiers II, III, IV, and V are also emerging, and Nestle is actively assisting them through appropriate portfolio adjustments and expanding distribution channels.
“In fact, if you look at urban penetration now for the company, which five years ago was about 80 per cent today it is about 93 per cent and similarly, rural penetration also has gone up significantly to rate to about 30 odd per cent, which was in a mid to high single digits a couple of years ago,” he said.
This as a cumulative effect has led to good results. In the last 28 quarters or 22 quarters, Nestle India has reported double-digit quarters, he said.
The company’s growth is evident in its capital expenditures (capex), with the current investment at 8 percent of its turnover, a considerable increase compared to previous levels.
“In the last seven, eight years, it was in the region of about 2 to 3 per cent,” said Narayanan.
Nestle is also keeping its innovation tempo high and has launched 130 new products in the last seven years, which is helping to diversify its offerings.
On the sales front, Nestle is now using AI-enabled analytics for sales automation. Many of its brands like KitKat, Maggi and Nescaffe are highly digital now in terms of consumer outreach.
“Almost 40 per cent of our media expenses as a company if we look at aggregate is being spent on digital today,” he added. In the December quarter Nestle India contributed 7 per cent of domestic sales.
Late last year, the board of directors at Tomorrowland Apparels Pvt Ltd, the parent entity of Bombay Shirt Company, passed a resolution to allot 2,01,543 Series B Compulsory Convertible Cumulative Preference Shares (CCPS) to four investors, including Singularity Ventures and Sacheti.
Should the existing investors decide to infuse more capital or new investors come to the cap table, the round size can further increase.
The development comes almost four years after Bombay Shirt Company announced raising $8 million in a Series B funding round led by Mumbai-based Lightbox VC.
Established in 2012 by Akshay Narvekar, Mumbai-based Bombay Shirt Company specializes in providing custom-made shirts to its consumers through its online platform. Presently, the startup operates approximately 18 stores situated in different cities such as Mumbai, Delhi NCR, Bengaluru, among others.
As per the startup’s website, it currently offers a range of products including custom-made shirts, jeans, chinos, and t-shirts, among others.
Within the Indian market, Bombay Shirt Company competes with brands such as The Pant Project, Snitch, Damensch, Souled Store, XYXX, and others.
It’s worth noting that Singularity Ventures recently injected new capital, which follows shortly after the firm’s announcement of the initial closure of its second fund, the Singularity Growth Opportunities Fund II, with a sum of INR 500 Cr. This second fund now boasts a total corpus of INR 1,500 Cr.
Singularity, established in 2021 and spearheaded by Yash Kela, is backed by the Singularity Ventures family office, founded by former Reliance Capital executive Madhusudan Kela in 2016. Singularity has directed investments towards startups such as mCaffeine, Exotel, WebEngage, XYXX, and Lohum Cleantech.
Singularity is focused on consumer goods, manufacturing, enterprise software, and financial services.
However, Singularity’s investment in the Bombay Shirt Company was made through its INR 560 Cr Fund I, which closed in March 2023.
On Thursday, Thampy Koshy, the MD & CEO of the government-backed Open Network for Digital Commerce (ONDC), said that the platform currently hosts approximately 300,000 merchants and is expected to multiply in the coming year.
“We started with 600 merchants on-board in January last year. At present there are around 3 lakh merchants (on-boarded). In the coming year we expect this will be multiplying and build its momentum. At least ten times growth I expect in the coming year,” Koshy said during an event.
He added that in January, ONDC recorded 6.7 million transactions, and he anticipates a monthly transaction growth of 20-30 percent moving forward.
Koshy was addressing the audience following the signing of an agreement between QCI and ONDC during the launch of the DigiReady Certification (DRC) portal.
For the DRC initiative, QCI and ONDC aim to assess and certify the digital readiness of MSME entities. With the help of an online self-assessment tool, MSMEs can evaluate their preparedness to seamlessly onboard as sellers on the ONDC platform, thereby expanding their digital capabilities and business potential.
“It is a way of helping people to be ready so that they can join the network as fast as possible. We are expecting that thousands of them will come onboard,” Koshy said.
Jaxay Shah, Chairperson of the Quality Council of India (QCI), said, “The launch of the DRC portal marks a pivotal moment in our mission to empower MSMEs and make e-commerce more inclusive and accessible.”
ONDC is an initiative of the commerce and industry ministry aimed at creating a facilitative model to help small retailers take advantage of digital commerce.
It’s not an application, platform, intermediary, or software; rather, it comprises specifications crafted to promote open, unbundled, and interoperable networks.
Celebrity chef Harpal Singh Sokhi‘s renowned fine-dining restaurant chain, Karigari has entered South India with the opening of its latest outlet in Bengaluru. According to an industry official’s post on social media, the new establishment is located at Phoenix Mall of Asia, Yelahanka, Bengaluru, Karnataka.
This marks the eighth restaurant for Karigari in India.
“Master chef Harpal Singh Sokhi brought its first restaurant in Southern India. Karigari is now launched at Mall of Asia, Bengaluru,” said Ketan Kulkarni, general manager – leasing, at The Phoenix Mills Ltd. in a LinkedIn post.
The chef-led restaurant Karigari was founded by Yogesh Sharma with chef Harpal Singh Sokhi as its face. Its outlets blend traditional Indian flavors with a contemporary touch.
Currently, Karigari boasts a presence in cities such as Delhi, Dehradun, Faridabad, Gurgaon, and Noida.
Karigari is owned by Flying Dutchman Restaurants LLP, the entity responsible for the jungle and aqua-themed restaurant ‘Jungle Jamboree’ and the seafood restaurant ‘The Flying Dutchman’.
The collaboration aims to deliver key staples directly to consumers’ homes via the ONDC network.
According to a statement by the ONDC, people residing in the Delhi-NCR region, including Gurugram and Faridabad, will be able to purchase Bharat brand rice, wheat flour, and lentils online. The products come with the assurance of government-approved prices and complimentary delivery services.
T Koshy, Managing Director and CEO at ONDC, said, “The ‘Sarkar se Rasoi Tak’ initiative epitomises the transformative power of digital commerce in democratising access to essential goods. ONDC is proud to participate in this collaborative effort to promote inclusivity and empower consumers across India.”
Consumers can utilize ONDC-supported buyer applications like Paytm, Magicpin, Mystore, and Pincode to place orders for these products.
“Leveraging the ONDC network’s wide reach and advanced technology, we’re set to redefine access to essential commodities,” said Anice Joseph Chandra, Managing Director at NCCF.
Furthermore, Shiprocket aims to enhance the seller experience within the ONDC Network by providing simplified onboarding processes and comprehensive post-support services.
“While this initiative is currently running in the Delhi-NCR region, we plan to expand it to other cities of the country via multiple collaborations,” said Saahil Goel, CEO and Co-founder, Shiprocket.
Incorporated on December 31, 2021, ONDC is an initiative led by the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, with the goal of pioneering a transformative framework for digital commerce.
For years, Zomato has relied heavily on food delivery, with a recent foray into quick commerce. However, alongside these ventures, the company has quietly nurtured another arm for nearly half a decade: Hyperpure. Now, Zomato is poised to ramp up efforts in this domain, exploring opportunities in food processing and supplying semi-finished perishables.
In Q3 FY24, the revenue of Zomato’s Hyperpure vertical surged by more than 2X YoY, reaching INR 859 Cr. Comparatively, on a quarter-on-quarter basis, Hyperpure’s Q3 revenue showed a 15% increase from INR 745 Cr reported in the quarter ending September 2023.
Launched in April 2019, the B2B restaurant supplies venture is nearing its fifth anniversary, and is now demonstrating much of the potential that CEO Deepinder Goyal and other company leaders have previously highlighted.
In the Q3 FY24 shareholders’ letter, Zomato attributed Hyperpure’s revenue growth to the significant expansion in both its core restaurant supplies business and the emerging quick commerce sector.
“To address a growing need of our restaurant partners, we are now setting up a plant for processing value-added food supplies including, sauces, spreads, pre-cut and semi-finished perishable products, among others,” the company stated in the shareholders’ letter.
Despite receiving occasional acknowledgment from Zomato’s management in each quarterly report since its public listing, there has been little insight into how the company plans to scale Hyperpure and integrate it more substantially into its overall business strategy.
For instance, during its first annual general meeting (AGM) after the public listing, Zomato stated that Hyperpure could emerge as big as or even bigger than its food delivery business.
“We think that this business has the potential of becoming as large or even larger than our food delivery business because the addressable market here is potentially larger than food delivery,” Zomato chairman Kaushik Dutta had said in 2022.
However, there were tangible advancements in the Hyperpure sector indicating Zomato’s commitment to long-term growth in the B2B supplies segment.
In August 2022, Hyperpure completed the acquisition of Blinkit’s warehousing and ancillary services business for INR 61 Cr. Additionally, last year in May, Zomato appointed Rishi Arora as the CEO of the Hyperpure vertical, signaling a renewed emphasis on profitability.
In November 2023, while announcing the Q2 results, Zomato highlighted that Hyperpure, serving as a strategic back-end for restaurant partners, was experiencing improved success.
Presently, Zomato generates revenue through various streams including ad revenue, onboarding fees, delivery commissions, and per-order commissions from restaurants. Hyperpure, as a vertical, was envisioned as a means to expand this revenue umbrella by attracting more restaurants.
In its Q3 report, Zomato stated that the addition of a processing plant for food supplies holds the potential to increase margins and foster greater engagement with its restaurant partners.
This is significant because the company’s average monthly active food delivery restaurant partner base has increased by 21% over the last four quarters. Transitioning from 209 such partners in Q3 FY23 to 254 monthly active restaurant partners for food delivery as of Q3 FY24, Zomato aims to capitalize on this expanding base to maximize revenue from restaurant partners.
Meanwhile, Zomato experienced a significant surge in its consolidated profit after tax, rising to INR 138 Cr in Q3 FY24 from INR 36 Cr in the preceding September quarter.
Zomato, a leading player in the foodtech sector, has completed the liquidation of its subsidiaries in Vietnam and the Czech Republic.
In an exchange filing on Wednesday, Zomato announced that its subsidiary, Zomato Vietnam Company Ltd (ZVCL), has been liquidated with effect from February 2, 2024.
In another exchange filing, Zomato stated that its Czech subsidiary, Lunchtime.cz s.r.o, has also been liquidated, effective from February 6, 2024.
In an exchange filing on January 4, the company clarified that ZVCL is not considered a significant subsidiary, and its dissolution will not impact the company’s revenue. ZVCL’s net worth was reported to be INR 36 Lakh.
The liquidation of the two businesses comes at a time when the startup is aggressively closing down its international subsidiaries. Last year, it shut down businesses in multiple countries, including Indonesia, Jordan, and Slovakia.
The startup is also currently in the process of liquidating another step-down subsidiary, Polish Gastronauci SP. Z.O.O.
It’s worth mentioning that the foodtech major has aggressively cut down its costs in the last two years to achieve, and subsequently sustain, profitability.
Earlier today, Zomato reported a consolidated net profit of INR 138 Cr in the December quarter of 2023. This marks a significant increase from the INR 36 Cr profit reported in the September quarter, following a net loss of INR 136.6 Cr in Q3 FY23.
Maintaining its robust performance, Blinkit, the company’s quick-commerce vertical, recorded its second consecutive quarter of positive contribution in Q3.
Before releasing its Q3 results, Zomato additionally disclosed that it had allocated 10.88 Cr equity shares through its various employee stock option plans (ESOPs).
Zomato’s shares concluded today’s trading session up by 2.42% at INR 144 on the BSE.
In another top-level exit at Swiggy, the food delivery major’s independent director Mallika Srinivasan has stepped down, nearly a year after taking up the role.
This development comes as Swiggy prepares to debut on the stock exchanges, touted as the largest IPO by an internet company, with an issue size of $1 billion (INR 8,300 crore).
The company announced on Thursday that Srinivasan has stepped down due to increasing business commitments.
“Working with a young and dynamic team at Swiggy was truly enriching and enjoyable and wished the Board more milestones and success in the years ahead,” Srinivasan said.
The latest development adds to Swiggy’s series of high-profile exits within a short span. Key figures including Karthik Gurumurthy (Senior Vice President and Head of Swiggy Instamart), Dale Vaz (CTO), Anuj Rathi (Senior Vice President, Central Revenue and Growth), Ashish Lingamneni (Vice President, Marketing), and Dineout co-founder Vivek Kapoor have stepped down from their respective positions.
In February last year, Swiggy appointed three directors to its board: Srinivasan, Shailesh Haribhakti, and Sahil Barua.
Interestingly, in December, Swiggy appointed FMCG veteran Anand Kripalu as an independent director and the chairperson of its board of directors to bolster its board ahead of its initial public offering (IPO).
The food delivery major also recently brought on board Ashwath Swaminathan, a veteran of Hindustan Unilever (HUL), as its chief growth and marketing officer.
Last month, Snackfax reported that the foodtech giant is looking to terminate 400 staff members, or roughly 6% of its total workforce, as part of a corporate realignment process. The layoffs are anticipated to affect employees across departments, with the technology and customer support teams facing the most significant reductions.
For the financial year ending March 2023 (FY23), Swiggy reported a revenue surge of 40% to INR 8,264.4 Cr from INR 5,704.9 Cr in FY22 as it scaled up its quick commerce vertical during the year.
Zomato‘s quick commerce arm, Blinkit, continued its growth trajectory, maintaining contribution positivity for the second consecutive quarter in the three-month period that ended December 31, 2023.
In its shareholder letter, Zomato reported that Blinkit’s contribution margin, as a percentage of gross order value (GOV), within the overall business, showed notable improvement, rising to 2.4% in Q3 FY24 from 1.3% in Q2 FY24.
The company defines contribution as adjusted revenue excluding costs related to dark store operations, delivery, packaging, and other expenses.
“In Q3 FY24, close to 70% of our stores were contribution positive and ~20% of these were operating at a 5%+ contribution margin resulting in a growing pool of contribution profit, which is creating room for investing in new stores while also continuing to improve the aggregate contribution margin,” Blinkit Co-Founder and CEO Albinder Dhindsa said.
In Q3 FY24, Blinkit recorded a revenue of INR 644 Cr, compared to INR 301 Cr in the same quarter last year and INR 505 Cr in Q2 FY24. The adjusted EBITDA loss for the quick commerce vertical continued to improve, reaching INR 89 Cr in the quarter ending December 2023, down from INR 227 Cr in Q3 FY23 and INR 125 Cr in Q2 FY24.
Driven by festive growth, Blinkit experienced a significant increase in both operational and financial metrics. Gross order value (GOV) surged by 103% year-on-year (YoY) to INR 3,542 in the quarter ending December 2023, while the average order value (AOV) saw a 14% YoY increase to INR 635 in Q3 FY24.
Dhindsa attributed the increase in demand to the festive season, noting that a significant portion of the growth in Gross Order Value (GOV) was driven by higher order volumes. Additionally, he highlighted that the GOV was bolstered by an uptick in Average Order Value (AOV), influenced by a greater proportion of product categories with higher average selling prices.
During the quarter, the company expanded its footprint with the addition of 40 net new stores, bringing the total store count to 451 by the end of December 2023.
In its third consecutive profitable quarter, Zomato saw a significant increase in consolidated net profit, which quadrupled sequentially to INR 138 Cr in Q3 FY24. Additionally, the foodtech major experienced a substantial 68% year-over-year surge in operating revenue, reaching INR 3,288 Cr in the same quarter.
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