Snap shows who’s boss 😎

Earnings galore, Vaccine distribution, and venture deals.

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Market Summary: 📊

Indian markets continued a steady upward move on Thursday. US almost predictably turned around as the looming elections continue to give investors jitters.

US:

  • S&P 500 - down 0.22%

  • Nasdaq 100 - down 0.11%

India:

  • Nifty 50 - up 0.34%

  • Sensex - up 0.40%


Dalal street had a busy day 🧐

Few major Indian companies reported their business performance for the last three months. Some were good, a couple not so much, but all had some insights on the live condition of the India-machine.

First, the good stuff:

  • Colgate’s revenues were up by 5.2% to ₹1,285 crores while operating profit grew 26.8% as the company used the pandemic to streamline operations. All product lines of the company grew positively, highlighting that broad consumer demand is showing promise. The company issued a dividend as well, pleasing value investors.

  • Nestle Swiss, the parent entity of Nestle India, in its earning release gave some color on Indian market performance. Apparently growth in India is looking solid, helped by strong momentum in KitKat, Maggi, and Nescafe (thank you, incessant snackers!). Nestle India will report its numbers in 2 days.

Takeaway: first, no catastrophic withdrawal in consumer spending. Secondly, market leaders have unanimously used the pandemic to shed excess fat and trim costs, which is brilliant.

Now to the okay stuff:

  • Bajaj Finserv—the financial services giant’s profits took a hit as the company kept some money aside to take care of any “bad” loans that come from COVID’s fallout. Investors weren’t very happy about that, but its not exactly a problem for the company because they have ample cash to handle any problems. On the other hand, total revenues grew a robust 5.8% to ₹15,052 crores—thanks to fledging demand for insurance right now.

Takeaway: any financial services company that operates in “lending” will be squeezed during recessions. That’s not out of order. The real deal here is the boom in insurance. As we saw last week with HDFC Life as well.

I’ve tried explaining this as simply as I could, but seriously, phew, too much finance. 🥱


Paying our gratitude 🙏

India will vaccinate 30 million people, prioritizing its frontline warriors during the first phase of COVID-vaccination, as the health ministry yesterday gave some color on the vaccine distribution plans.

The group to receive the first doses will include about 7 million doctors and paramedics nationwide, and some 20 million other front line workers and hospital staff who have relentlessly served the nation through this nightmare. 

Government estimates the first phase is likely to go into motion between Jan and June 2021, depending upon how R&D pans out. Partnerships for vaccine sourcing + manufacturing have already been established with almost all leading global initiatives, in addition to India’s domestic R&D efforts.

As far as vaccine distribution goes, you can trust that to be a seamless process given India’s exceptional track record of carrying out mass distribution efforts in the past. Read more.


An impressive venture raise 💰

Dukaan, an emerging high-flyer that’s helping India’s solo merchants set up shop online and sell via Whatsapp has raised $6 million from Lightspeed India and Matrix, with a wide list of reputed Angels pitching in, including Ryan Hoover of Product Hunt, Kunal Shah of CRED.

Difficulty in building an online presence can be debilitating for small merchants. Dukaan’s platform makes this process pretty simple - you can sign up and get off to a start in 30 seconds. It allows shoppers to create a store, and share product links via whatsapp, collect payments and then track delivery and such. Basic stuff, yet a blessing in these times.

Started just this year, the company has seen phenomenal growth too. They claim to have over 2.7 million merchants using the service, having processed over 6 lakh orders so far, resulting in a total gross merchandise value of over ₹100 crore. Impressive!

Here’s a tweetstorm the founder posted yesterday that’s truly heartening 👇

Worth mentioning—one of the cofounders of Dukaan is currently embroiled in a legal dispute with one of the kirana-tech players Khatabook, which had even prompted Google to remove the app from the play store.

While we’re talking about capital investments,

Siemens Healthineers, the medical technology unit of Siemens, will deploy about ₹1,300 crore to set up a new campus in Bengaluru. In line with other innovation hubs across the world, the facility will focus on R&D and manufacturing of medical technology solutions for emerging markets and will employ nearly 1,800 more specialized professionals over the next 10 years

To be opened in 2025, the facility will be designed to use best of breed tech including AI, IOT, and other to accelerate medical-tech research. Sounds like a brilliant victory for India’s talent pool when companies all over are withdrawing or scaling back on capital commitments.


Snapchat’s illustrious comeback 👊

For 4 years since its IPO, Snapchat has been the butt of jokes on Wall Street. The company, losing cash by the boatloads, was struggling to find a credible use case.

Then COVID happened. Suddenly teenagers, unable to hang out in person, found themselves burying their nose even deeper into their smartphones. All that heightened digital activity, combined with a Snap CEO’s shrewd call to revamp the app and make it friendlier to use, meant the kids couldn’t get off of the app. 

And that showed yesterday when the company reported 52% growth in revenues, smashing projections for engagements in every possible way. Quick highlight:

  • Daily active users up 18% to 249 million

  • Quarterly revenue of  $679 million

  • Snaps created each day up 25% on average

In simple words, engagement is up, usage is up, advertisers are buying more ads, and Snapchat is putting all that money into pushing the needle on augmented reality.

Investors quickly sent the stock up like 30% and the company cemented its position in the $50 billion club. But most importantly, investors and competitors learnt a lesson—to never ever underestimate the 30-year old Evan Spiegel again.

And a quick look at Netflix’s gigantic dump

While Snap killed it, Netflix’s disappointed big time. The company fell short on new subscriber additions. Basically, so many people subscribed to Netflix in the beginning of 2020 when peak lockdowns hit, that the company is having trouble fishing for more growth now this far out in 2020.

If you ignore that trend, there were ample bright spots in their report though, like the company increased revenue by 23% to $6.4 billion in the quarter and considerably improved its cost structure.

Notice on the chart below how in the first 3 months of this year, Netflix suddenly added like 15 million new connections out of nowhere, which is now making it hard to find more subs. Despite that, the company would’ve added 35M subscribers by the end of this year on an average basis!


What else are we snackin’ 🍿

🖥️ Extending work-from-home - Amazon has told some of its employees that they can choose to work from home until June. This announcement comes soon after the ecommerce giant announced that more than 19K of its frontline employees contracted the virus. Non-desk job employees get no relief however.

📺 Netflix struggling for India headway - Netflix is planning to give users in India access to its service at no charge for one weekend as the streaming giant is looking to expand its reach in the country where it competes with the likes of Disney plus, Amazon and others.


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