Can JioMart, Rapido change the game for Eternal, Swiggy? Deven Choksey answers
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, MD,, says coming to cash rich platform companies, while there's conversation about Eternal , Rapido and Swiggy , we are undermining the big elephant sitting in the room – JioMart . They have started the deliveries without charging the platform fees , whereas the likes of Blinkit and Swiggy charge fees. Players like JioMart with a significantly large amount of cash rich abilities can counter these kind of players in the marketplace.At the same time, most of these companies from investment perspective when we look at them, they are actually quoting at a fancy valuation s given the fact that they have been succeeding with the price hike and the charges, these fancy valuations might get affected if the competition like JioMart could start penetrating faster and could possibly create disruption with them. So, let us see how it goes, but not very comfortable because of the valuation also at the same time.I do not know whether it is sluggishness, but I do agree with one thing that the markets are basically moving with the rotational preferences. The RBI has brought down the rate of interest and infused the liquidity to CRR cut. Most of the banking stocks have started to find themselves in the favour also from the perspective of momentum as a result of which, some of the other stocks are not catching up with this momentum and are getting less preference which is justified.This remains by and large a market where a higher amount of momentum-based trading activity is happening. Also as valuations are otherwise reasonably priced, they are more or less discounting FY27 earnings from the perspective of whatever earning growth we are experiencing currently. I guess till '27, most of the stocks are fully priced in, as a result of which the markets because of the liquidity as well are basically showing higher amount of churn in the portfolios of some of the investors.Maybe that is a way to operate this market and in such kind of a situation, when individual stocks correct or provide opportunity in the price corrections, that becomes a buy opportunity in my viewpoint and that could include some of the select ones – be it in the area of metal and commodities or auto and auto ancillaries, where we remain confident about the growth prospects going forward.We are not so bullish about these companies particularly because they are driven significantly by some of the variables which are not in control of companies. For example, the government policy is controlling the gas price. We ourselves do not find it very comfortable with this particular space at all because the smallest factor could possibly affect the business of these companies.Having said that, from the utility perspective, these companies have created a significantly large amount of distribution points with the end consumer, be it on a B2B side of the activity where they would supply to the bulk consumers like gas stations. Otherwise, this is being supplied through the pipe gas to the consumers in general. In my view, both B2B, B2C models are definitely existing distribution points well connected. The fact remains that it is dependent on the government policies and that is why we are not very confident about putting a confirmed recommendation or confident recommendation.You touched upon a very important point. As for cash rich, I believe that while we are talking about Eternal, we are talking about Rapido, we are probably undermining the big elephant sitting in the room which is JioMart. They have already started the deliveries without charging the platform fees, whereas the likes of Blinkit and Swiggy charge fees. On multiple instances, be it from the customer they charge the platform access fees or be it from the hoteliers for whose food they are supplying or even for that matter other areas in which they are operating, I believe this is going to get significantly challenged with the players like JioMart who are having a significantly large amount of cash rich abilities to counter these kind of players in the marketplace.At the same time, most of these companies from investment perspective when we look at them, they are actually quoting at a fancy valuations given the fact that they have been succeeding with the price hike and the charges, these fancy valuations might get affected if the competition like JioMart could start penetrating faster and could possibly create disruption with them. So, let us see how it goes, but not very comfortable because of the valuation also at the same time.
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