Daily Voice: Divam Sharma explains why he leans towards Zomato and not Swiggy

AI is undoubtedly driving efficiency gains across industries, but we don’t see broad-based deflation in the near term. Some sectors, particularly technology-led services, will experience sharper price reductions as competition forces companies to pass on efficiency-driven savings to consumers.

But for commodities and manufacturing, the transition will be slower, given structural dependencies and supply-side constraints. In fact, these sectors could act as relatively safer places to park capital during this shift.

Overall, while AI is a powerful disinflationary force, its impact will likely be uneven—felt strongly in consumer-facing sectors in the short run and gradually in industrial supply chains over the medium term.

Are you bullish on food delivery giants?

Food delivery platforms remain one of the most exciting consumption stories in India. We’ve seen the industry evolve rapidly, and it now stands at an interesting inflection point. While growth momentum continues, what’s equally important is the improvement in unit economics, which suggests these companies are moving towards more sustainable profitability.

Price wars that earlier hurt margins are easing, allowing platforms to consolidate gains and focus on service quality. We remain cautiously optimistic, as the sector still faces competitive intensity and changing consumer preferences. Between the two leaders, we lean towards Zomato given its stronger execution, diversified product portfolio, and ability to capture higher-value urban consumers.

What are your expectations from RBI Governor Sanjay Malhotra’s policy statement on October 1?

We expect the RBI’s policy statement to strike a careful balance. With food prices easing and GST rationalization providing relief, inflation forecasts could be revised downward. This should provide some comfort to bond markets, potentially softening yields. However, on policy rates, we do not anticipate any immediate shift.

The RBI is likely to maintain a neutral stance, given the need to carefully monitor global uncertainties, particularly geopolitical developments and crude oil volatility. The central bank has been cautious in its approach, ensuring stability without overcommitting. Hence, while we might see a slightly more positive outlook on inflation, the overall tone is expected to remain measured.

Do you expect recent government measures to trigger a strong wave of consumption recovery in both urban and rural areas?

Government initiatives, coupled with the onset of the festive season, should certainly provide a short-term boost to consumption across both rural and urban markets. Tax reliefs, subsidies, and targeted spending are already creating a supportive environment. However, we must distinguish between a seasonal uptick and a sustained trend.

In the long run, true recovery in consumption will depend more on household earnings growth, job creation, and consumer confidence. Sentiment plays a critical role, especially in rural India where income shocks tend to be sharper. So while near-term numbers will likely look encouraging, sustainable momentum hinges on deeper improvements in economic fundamentals and household balance sheets.

Do you believe Nifty earnings could grow below 10% in the current fiscal and rise to the 15–20% range in FY27?

We are in the midst of a structural reset, driven by both technological transformation through AI and broader geopolitical realignments. For this fiscal year, we expect earnings growth to be somewhat muted, likely below the 10% mark, as companies adjust to changing cost structures and global uncertainties. That said, markets are already discounting some of this near-term weakness.

Over the medium term, however, we see room for optimism. By FY27, stronger earnings growth potentially in the 15–20% range looks achievable, supported by productivity gains, policy reforms, and rising domestic consumption. Investors should prepare for near-term volatility, but the long-term trajectory remains constructive.

Do you expect the market to remain range-bound and in a consolidation phase until there are strong signs of earnings growth and progress on an India–US trade deal?

Yes, we expect markets to remain largely range-bound in the near term. While the India–US trade deal is indeed a key factor to watch, even a signed agreement would not immediately eliminate uncertainty, especially with the unpredictability of US trade policy under a Trump administration. That said, a deal would be a positive signal, offering some relief to markets.

For now, investors should expect a consolidation phase as earnings growth remains the real catalyst for a sustained rally. In this environment, the unexpected geopolitical events, commodity shocks, or sudden policy shifts will likely drive volatility. We see this period as a breather before the next directional move.

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