Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Nifty tumbled over 300 points, with small and midcap stocks falling 2-4% each, as all sectors took a hit, led by PSU banks, realty and metals. The market was in rough shape, with the NSE showing just 1 stock rising for every 11 that fell and the PSU bank index dropping over 4% and realty down more than 3%.

TOP STORIES

Zomato’s Profit Skyrockets 389% Amid Expansion Strain

What Happened

Zomato delivered a staggering 388.9% profit boost in Q2FY25, raking in ₹176 crore compared to ₹36 crore the previous year. Revenues were equally mouthwatering, up 68.5% to ₹4,799 crore. This surge was spiced up by their rapid store expansion, adding 152 Blinkit stores and seven shiny new warehouses.

The company’s EBITDA also flipped from a loss of ₹47 crore last year to a tasty ₹226 crore. But hold on, the CFO admits this expansion binge is weighing on their margins, at least for now.

What’s cooking?

Zomato’s explosive growth highlights its strong market position, but rapid expansion comes at a cost. The company’s new stores and warehouses are profitable, but the initial ramp-up period eats into margins, causing concern in the short term. Blinkit’s aggressive store expansion strategy—152 stores in Q2 alone—reflects fierce competition with Swiggy, which is preparing for an IPO.

However, Zomato’s strategy to outgrow its competitors means it’s focused on long-term market dominance, even if it’s feeling the pinch now.

Zoom out

Zomato’s eye-popping profit jump and soaring revenues reflect its ambitious growth. Yet, adding stores and warehouses faster than you can say “home delivery” is taking a toll on margins. With the company also planning to raise ₹8,500 crore to bulk up its balance sheet, Zomato’s battle to stay on top of the food chain in India’s competitive market is far from over.

PAISON KA KHEL

ADB charges up West Bengal with $241 million

West Bengal is about to get a serious power upgrade, thanks to a $241.3 million loan from the Asian Development Bank (ADB). This initiative will boost electricity distribution for nearly 9 million people across seven districts, swapping out outdated power lines and separating feeders for farms and homes. 

Reliance Infra launches ₹10,000 crore defence project 

Reliance Infrastructure is jumping into the defence sector, planning to invest ₹10,000 crore in India's largest greenfield project in Ratnagiri, Maharashtra. This ambitious project, called Dhirubhai Ambani Defence City, will cover 1,000 acres and focus on manufacturing explosives, ammunition and small arms.

TOP STORIES

Ambuja Cements Acquires 46.8% Stake in Orient Cement 

What happened? 

Ambuja Cements, a company under the Adani Group, has acquired a 46.8% stake in Orient Cement for ₹8,100 crore. This deal includes a mandatory open offer of ₹395 per share to existing shareholders, aimed at acquiring an additional 26% stake. The acquisition, funded entirely through internal resources, will give Ambuja control over 7.76 crore shares (38%) from the promoter group and 1.82 crore shares (8.9%) from public shareholders.

Why it matters?

This acquisition strengthens Ambuja Cements' market presence, particularly in South and West India, where Orient Cement operates. Orient Cement, with a current production capacity of 8.5 million tons per annum (MTPA), can nearly double this capacity through future brownfield expansions by adding another 8.1 MTPA. Additionally, the company holds a valuable limestone mine in Chittorgarh, Rajasthan, capable of supporting a 6 MTPA expansion. 

Building up ….

For the Adani Group, this acquisition is part of its larger goal of reaching over 100 MTPA cement capacity by March 2025, a milestone within reach as Ambuja’s operational capacity now stands at 97.4 MTPA post-deal. The group is positioning itself for stronger competition within India's rapidly growing construction and infrastructure sectors.

• The deal not only adds 8.5 MTPA to its capacity but also increases Ambuja’s pan-India market share by 2%.

GLOBAL NAZARA

Is India approaching a cotton crisis?

India's cotton imports are projected to surge by 42% in 2024-25 due to a 7% decline in domestic production. The Cotton Association of India (CAI) attributes this drop to reduced acreage and damage from excessive rainfall. Imports are expected to increase from 17.5 lakh bales last year to 25 lakh bales, while exports are anticipated to fall by 37%, decreasing from 28.5 lakh bales to 18 lakh bales.

The total cotton supply is estimated at 357.44 lakh bales, with domestic consumption remaining unchanged at 313 lakh bales.

Musk and Ambani face off in India’s satellite internet showdown

The satellite broadband race in India is heating up as two of the world's richest men, Elon Musk and Mukesh Ambani, prepare to compete. Musk’s Starlink, with 6,419 satellites and 4 million subscribers globally, is eyeing the Indian market. Meanwhile, Ambani’s Reliance Jio has partnered with satellite giant SES Astra.

• India’s telecom regulator is yet to decide spectrum pricing and satellite internet subscribers are expected to hit 2 million by 2025. 

TOP STORIES

Air India Introduces One-Click Booking

What happened?

Air India is pumping over $200 million into upgrading its digital infrastructure as part of a bold turnaround plan. Once lagging in technology, the airline is now making strides to become the most tech-savvy carrier globally. A major part of this digital facelift includes a new website and app, which have already boosted direct bookings.

By December, Air India plans to roll out a "one-click booking" feature that aims to make booking flights as easy as ordering pizza—just enter your travel details and with a single click, you're all set to fly.

Why it matters?

Currently, about 75% of Air India’s ticket sales come through third-party channels like travel websites, which take a hefty commission. With direct bookings through its own platform sitting at 25%, the airline wants to shift the balance and save on those middleman fees.

Doubling direct ticket sales, as Air India aims to do in the next 2-3 years, could significantly boost the airline's profitability. 

• Plus, the use of AI is helping them tackle customer queries with impressive efficiency—97% of inquiries are handled without the need for human intervention.

Zoom out

Air India's investment in technology marks a pivotal moment in its transformation journey. With plans like "one-click booking" on the horizon, the airline is betting big on digital to not only streamline its operations but also improve customer experience. As it strengthens its tech backbone, Air India is setting itself up to compete more effectively, while also aiming to hit that 50-50 balance between direct and indirect bookings.

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