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Market summary: 📊
Good week in India as September inflation numbers and other data points painted an upbeat picture for the markets. US markets carried Thursday’s uncertainty into the weekend, ending relatively flat.
S&P 500 - up 0.01%
Nasdaq 100 - down 0.39%
Nifty 50 - up 0.70%
Sensex - up 0.64%
First things first, that a good wrap… 💪
All Indian IT giants wrapped up an amazing week in the markets, thanks to sellar Q2 earnings, with HCL (the last of the pack) finishing off things on a high note as well. Quick summary of their quarter:
HCL beat analysts’ estimates for revenue and profits
Increased revenue some 4.2% vs. last year to ₹18,594 crores
Grew profits by 7.4% to ₹3,142 crores
Despite pricing pressures and weakening demand in the entire industry, HCL grew its operating margins by about a percent, thanks to efforts taken to improve cost structure. In all, investors and analysts were cheering. Eyes are now set on HDFC bank’s earnings next week.🤞
While we’re still talking about the markets ☝️—
Gita Gopinath, the IMF’s Chief Economist, advised the Indian government that perhaps it should seriously consider opening up purse strings a bit to provide direct stimulus to those worst affected by the pandemic, specifically SMEs and low-income households with direct cash payments in their accounts.
So far the Indian government has been awfully conservative with direct support, but evidence around the world, including in the US makes a solid case for rapid economic recovery when the burden on the average household is lifted.
We’ll see if the government cares, but the timing could’ve worked like magic especially with Diwali coming up. Onwards...
Enough of this please? ✋
Uber is looking to hire more tech talent from India over the next few years, in a bid to reduce its costs and access a wider talent pool. Sounds cool, with jobs flowing in and all that, but when you make it seem like you’re out buying chicken nuggets for pennies on the pound, feel like you can do better?
Here’s how the headline from TechCrunch read—”Uber is hiring hundreds of engineers in India to cut costs“. There’s so much more Indian tech talent can offer beyond cost savings, like diversity or raw horsepower, and it sucks to have big tech, even in 2020, view the pool transactionally, like an accounting gambit.
Anyway, the company plans on adding some 225 engineers to replace the recently laid off staff in the west, now that it has some clarity on a post-COVID comeback for ride-hailing. The majority of this staff will be based in Bengaluru. Good luck.
Auto is back with a bang 💥
Indian auto industry made a resounding comeback for the month of September, with demand growing as much as 26.5% for last month vs. the same time a year ago.
In total, the auto industry sold about 2.7 lakh car units for last month, relative to 2.15 lakh units it had sold for the same month in 2019. Passenger car sales were up nearly 29%, amounting to 1.7 lakh units sold.
What to make of this—the growth rates are staggeringly high because pent up demand from people who had pushed their purchases through the lockdowns, are coming through now. October will likely be high too given we’re entering a festive mood but expect demand to slowly cool-off from there as we get back to normalcy.
On another note, it’s great to see the auto industry, millions of its workers, and associated economies get a much-needed boost. Also, props to the auto-industry for quickly standing back on its feet and delivering on these levels of demand, despite being hit hard and struggling with a mass exodus of migrant workers around the nation during peak lockdowns.
Ringing in an AR victory 👏
Avataar.me, a 3D and AR-software experience platform that allows developers to seamlessly bind images and create 3D experiences, has raised a solid $7 million Series-A from Sequoia Capital India.
Founded 4 years ago, the company spent considerable time on R&D, fine tuning and adapting its tech to acceptable standards of fidelity and real-word applicability. They’re now looking to get to market with digital commerce specific use cases—so far, thriving on use cases specific to auto sales and projecting bulky merchandise inside homes for consumers before making purchase decisions.
Funds will be put to use in advancing R&D while ramping up launches in global AR markets including the UK, Germany, and Japan by next year.
Key takeaway: as 4G paves way for 5G, and hardware vendors like Apple add features to devices (like the LiDAR camera), augmented reality is slowly coming of age. Snap, the foremost “camera” company already announced moves, FB will be preparing to move in soon. In that context, expect investor interest in this arena to slowly heat up near term.
Turning heads to Zomato 🙌 —
The food delivery platform has scooped up another $52 million from Kora Investments as part of its ongoing $600 million financing round, which is believed to be enough to see them through an IPO scheduled for next year. So far the company has seen some $270 million flowing in from giants including Tiger Global and Temasek.
Valuation is hovering around $3.4 billion, and management is counting on these funds to help them streamline operations while mounting an aggressive offense on Swiggy and others in the delivery arena.
Finally, an update for “future of work” builders -
New York-based accelerator, WeKan, plans on investing in 20+ startups in the “future of work” space in India over the next 3-5 years. Aiming for an avg. $250K deal size, the venture platform is specifically targeting bids in Low or No-Code, DevOps/Infrastructure, API economy, and other software led initiatives.
A dedicated India focused team has already been put into motion. This sounds like a continuing trend where global investors are desperately foraging to get ahead of the hottest coming out of India.
Tweet of the day -
What else are we snackin’ 🍿
✋ Block and seed - The government has banned imports of air conditioners with refrigerants in a bid to promote manufacturers domestically, in line with the Make in India agenda.
🎤 Yes, this please - Google is introducing a feature that will let users figure out which song is stuck in their head by humming, whistling, or singing. Users can tap on the microphone icon, and either verbally ask to search. Finally, an AI use case all of mankind can rally behind.
👻 Snap makes a small TikTok move - Snapchat has launched sounds - a feature that lets users embed music in their “snaps” from a bunch of emerging and established artists. Social platforms are working hard to embed the ability to “entertain” within mundane communications.
🙌 HCL promised some jobs — the company will hire 12,000 fresher students for FY21 from campus placements, in what comes as a desperately needed ray of hope for India’s employment situation in the COVID world.
💄 Bollywood bets on ecommerce - Katrina Kaif is the latest investor in Nykaa. The amount is undisclosed but a deal tied in endorsement could be in the mix here as just last year she launched her own beauty line on the platform.
Hit that 💚 if you liked today’s issue.
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