BofA sees strong first quarter for Indian nternet platforms

Investing.com -- Bank of America said most listed Indian internet companies under its coverage are positioned to gain market share and show margin improvement in a favorable regulatory environment.

The bank maintains Buy ratings on Eternal, Delhivery and Paytm. It holds Neutral ratings on Meesho, Nykaa and Infoedge despite steady to improving business trends, citing balanced risk-reward.

Eternal showed strong performance in both quick commerce and food delivery compared to Swiggy. Swiggy's EBITDA numbers were soft in both segments. MakeMyTrip delivered results above expectations despite air travel softness, while Ixigo's EBITDA missed due to higher investments.

Meesho reported healthy net merchandise value growth with lower-than-expected losses. Delhivery's revenue and guidance beat estimates on strong Express and part-truck-load business, but EBITDA missed despite accounting for high fuel costs.

Nykaa showed strong momentum in both beauty and personal care and fashion segments. PB Fintech reported 40% revenue growth and beat consensus EBITDA by 6%, though regulatory concerns may have affected market reaction. Paytm posted 28% revenue growth with approximately 5% EBITDA beat driven by operating leverage.

Naukri trends improved with 18% billings growth and strong margins. Urban Company surprised positively on its core business, but InstaHelp losses widened.

Following first quarter results, consensus estimates saw revenue upgrades for fiscal years 2027 and 2028 for all companies except Ixigo. Urban Company and Meesho received the highest revenue upgrades. MakeMyTrip and Paytm saw EBITDA upgrades, while Swiggy, Delhivery, Meesho, Ixigo and Urban Company faced cuts exceeding 10%.

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