Post-demonetization is going to be one of the most interesting earnings seasons in, at least, in this sites history: Here are some things that we’re going to keep an eye out for in the upcoming results:
1. Bank data post demonetization: Okay, so we already have some information here, but the larger banks, State Bank of India, HDFC and ICICI still haven’t announced Q3 results. Keep an eye out for data on whether card spends increased, and by how much. How were ATM withdrawls impacted? Impact of the temporary reduction in MDR on Fee revenue. Axis Bank has reported an 82% increase in card transactions. Much more here.
2. What’s happening with the MakeMyTrip-GoIbibo merger? The deal, combining the largest Online Travel Agent in India, with the one that has probably lost the most money (to become the number two) flight ticketing business in India, hasn’t still been completed. The transaction (all the details here) was expected to be closed by the end of December, but the deadline has now been extended till April 1st 2017. In the meantime competitor and cousin-brother-concern Yatra has been listed.
3. Why HT Media fast forwarded its “cost optimisation” plans: On November 3rd 2016, HT Media said it was reviewing its operations, and would fire people, or as they put it, take action on recommendations related to “cost optimisation”, by the end of the financial year, which essentially would have been around March 2017. Instead, the company, earlier this month, shut down four editions and three bureaus. Is there more coming? How did demonetization impact advertising in both Hindi and English print. We’ll get to know soon.
4. The state of the frazzled telecom operator ecosystem: How much are incumbent telecom operators bleeding because of the unwelcome (only for them) “Welcome offer” from Reliance Jio? They can hold off against free only for a limited amount of time, but as non-early-adopters also start switching to Jio, telecom operators have been offering better deals to retain users. How much has that impacted the cost-per-minute metric for incumbent telecom operators? By the way, if you’re still looking at ARPU, you’re making a mistake. ARPU doesn’t matter in a multi-SIM card environment.
5. Zomato’s Info Edge conference call: There’s no guarantee that this will happen, but it has been seven months since Zomato founder Deepinder Goyal said that their competitors only have 6-9 months left to survive. Last I checked, Swiggy was still delivering, and Paytm was saying that it isn’t trying to flick Zomato customer data.In case you missed it, there were great details of Zomato’s unit economics in that earnings call as well. Goyal and Zomato have been awfully quiet for a while, and it would be great to get an update on the unit economics, and maybe on how long Goyal now gives his competitors. The least he could do is order them something nice, with a note that says “Sorry, I shouldn’t have…”.
6. Payments Banks talk: Only Airtel has launched its Payments Bank this year, after a really short pilot rollout, and Paytm is expected to launch in February. Still following very little interest in Payments among investors, it will be interesting to see what questions investors have for each of the three (or two?) telecom operators – Airtel, Idea and Vodafone. Remember that several Payments Bank licensees actually returned their license.
7. JustDial’s Omni product: Directory services company JustDial kept hinting and teasing about its new Omni product until it finally did. It was even making some money. Investors certainly seemed very optimistic about the entire thing. But last quarter, JustDial cut back its forecast on how many people it could bring on board the Omni product. Calls with investors should reveal more.
8. Jobs Data from Info Edge: Zomato investor Info Edge, always with an eye on investor expectations (there isn’t an Internet company which releases more data than they do), is already tempering down investor expectations by saying they’re worried about a slowdown in IT (one of their largest business segments). Q3 is, historically, their worst quarter, owing to a decline in hiring around the festive season. So the number to watch for is the year on year performance, and the impact that November 8th had on business.