Calm yoself, Nykaa incoming 🤙
Crypto raises, Delta is killing, and Cogni losing kids.
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Market summary: 📊
After 3 straight days of decline, India saw a much welcome positive day. Western markets had a good day too, with post-COVID stocks favored.
US:
S&P 500 - up 0.42%
Nasdaq - up 0.20%
India:
Nifty 50 - up 0.44%
Sensex - up 0.40%
What’s brewing hot? ☕
✅ Sony gettin’ screwed — Ps5 has become the fastest selling console ever to be launched by Sony, with more than 10 million units sold in the past 7 months. But… the shelves can’t be restocked as fast as they’re being cleared. The ongoing chip shortage is becoming a party spoiler, with commodity components becoming hard to find, adding lead times to delivery fulfillment. Lots riding here on this for $SNE as big tech competition comes after gaming.
✅ 2020 all over again — western world’s COVID trumping was short-lived. Delta variant cases are again making governments nervous, with new cases slowly ticking upwards. Cities like New York are offering $100 for citizens to get their shots. Google, Amazon, Twitter have delayed office reopenings. Indoor mask mandates have been enforced by the CDC, and markets are buckling up for a bumpy ride.
Add to that, the US 2nd quarter GDP numbers fell short — with growth at 6.5% vs. 8.4% expected.
Ma’am, we’re ready 🤙
Online beauty retailer Nykaa is ready to file its docs with SEBI in the next few days — getting one of the most anticipated listings of the year 1 step close to reality.
Nykaa will raise ~$400 million at a $4 billion valuation, says Moneycontrol, with early backers TPG and Fidelity likely to hit the door. Founder Falguni Nayar and family will continue to hold a 51% stake — what a boss!
Game play — for those just catching up here, Nykaa is the front runner in India’s exploding direct-to-consumer cosmetics industry, selling a variety of beauty products via a battle tested omnichannel model (online + ~70 physical stores). Revenues topped $250 million last year, and profitability should be in sight.
Dig in when the docs drop in a few days!
Big picture — solid $250M revenue base, a well known brand, strong tailwinds delivered by explosive demand in ecommerce, and a fertile backdrop set by the $ZOMATO bid. Are we the only ones thinking $4B is a goddamn steal here? 🤷♀️
Venture Street’s crypto day 📈
What’s poppin’ — CoinDCX is apparently in talks with B Capital, Coinbase, and PolyChain Capital for a $120 million funding round that'll value the company at a billion dollars.
CoinDCX has some 1.5 million customers, and has grown its user base nearly 700% in the last 12 months. Crypto prices are still trading at 40-50% lows from the peaks, but volatility has become part of the game, and retail investors' enthusiasm has been defiant throughout.
Bottomline — regulatory uncertainty is the biggest overhang for players here, otherwise you bet your ass the asset class is here to stay.
Meanwhile, another direct-to-consumer raise in the making 💯
Sequoia and Unilever Ventures funded Minimalist — another online beauty startup with a $15 million Series A check.
Minimalist sells a tight catalog of products like serums, toners, face acids and moisturizers on third-party marketplaces and its own website — and this’d probably be the 6th or 7th raise in online cosmetics we’ve seen in the past week alone!
How them cars selling booo? 🚗
April-June freeze forced consumers to delay their car purchases — and Maruti hit some hiccups. Declining margins, and rising raw material expenses, further soured the party!
Quick look at numbers during 2nd quarter:
Revenues of ₹17,770 crores, up 4x, but that’s because business was 0 a year ago
Net Profit of ₹440.8 crores, a 62% sequential drop
Sold 3.5 lakh cars, 25% less compared to last quarter
Margins were almost cut into half, mainly because of high raw material expenses. Management wasn’t too optimistic about that changing anytime soon either.
Key takeaway — expectations were low going in, but investors were jjussssst hoping to be delightfully surprised. Didn’t happen, so stock was beaten 3% down.
Meanwhile in the FMCG space, 🔥
Like its other consumer goods peers, Nestle reported a 11% YoY increase in net profit of ₹538.6 crores, with revenues growing 14%.
Best part? — Nestle says its digital sales grew a whopping 147% so far in 2021. What happens when the old guys learn the new game?
Closing out — Apple is hurting Facebook 🙄
What happened — Apple iOS 14’s new privacy settings, which basically allow users to ask apps to stop tracking them, have begun hurting Facebook’s business.
Facebook told investors it expects 2021 revenue growth “to slow down significantly” going forward, leaving a bad aftertaste for Wall Street.
Otherwise, Facebook’s second quarter was pretty phenomenal, totally worthy of that Zuckerberg hydrofoiling with a flag stunt.
Revenues grew 56% YoY to $29 billion — trillion dollar companies, growing that fast!
2.9 billion monthly active users, 1.9 billion open the apps EVERYDAY
Operating margins improved to 40%+
Big picture — $FB is a cash machine of epic proportions, and big tech giants are not just bringing vanilla revenue growth here, but excellent financial discipline that mainstreet investors never imagined Silicon Valley’s excess was capable of delivering.
But, stocks ride on the promise of the future, and for now, Tim Cook casts a monstrous shadow over pirate-Zuck’s ships in this part of the ocean.
What else are we snackin’ 🍿
💼 Hiring alert - IT giant Cognizant will hire over 1 lakh people this year as attrition rates spike to an all time high of 31%. May be pay them well?
🚀 Poach the best - NPCI’s bill payment service, Bharath Bill Pay, poached PayU executive Noopur Chaturvedi as its new CEO.
Hit that 💚 if you liked today’s issue.
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