Category: Case Study

Flair Vs DOMS: Unveiling The Best In Stationery Industry
Standing in a stationary shop and wondering which pen to buy for your project or trying to choose which colour palette to choose to paint your canvas? We often end up in such situations, and do you know there are two listed companies in India operating in this industry?

The two companies are Flair and DOMS. These two companies are household names in India, catering to the diverse needs of students, artists, and professionals. Let’s explore these two companies.

Flair Writing Industries Limited

The company was established in the year 1976. Flair is a prominent name in the world of writing instruments, specifically in India. It is headquartered in Mumbai and was founded by Mr Khubilal Jugraj Rathod with a range of metal pens.

The company is committed to quality and innovation, consistently striving to develop new and improved writing devices. Flair’s pillar stones include commitment to Quality and innovation. It develops and manufactures a wide variety of products that are tailored to today’s continuously shifting market.

Did you know?

Pierre Cardin pens are the most widely used flair pens and a style statement with world-class quality.

DOMS Industries Limited

DOMS Industries is another major brand in the Indian market. The company was originally incorporated as ‘Writefine Products Private Limited’ and in October 2006, it was renamed to “DOMS Industries Private Limited”. It traces its lineage back to over 4 decades.

The company has achieved significant growth and brand recognition since its establishment. It offers a wide range of products such as drawing materials, gifting items, pens, and geometrical instruments, paper materials, kits & combos, etc. The company has a strong distribution network in over 45 countries.

Comparative Analysis

Market Capitalisation (As of 2 February 2024)

Flair – Flair is a small-cap company with a market cap of INR 3,419 crore.

DOMS Industries – DOMS Industries is also a small-cap company with a market cap of INR 8,615 crore.

Share Price (As of 2 February 2024)

Flair – INR 324

DOMS Industries – INR1420

Product Portfolio

Flair provides a diverse range of writing products such as pens, pencils, crayons, etc. and stationery products, such as notebooks, diaries, calculators, etc. The products are generally affordable, high-quality, and are meant for everyday use. Flair’s recent developments in premium collections are noteworthy.

On the other hand, DOMS Industries boasts a wider variety of scholastic stationery and art materials such as paints, canvas, brushes, and even office supplies. The company caters to both basic and professional artistic needs. The company’s collaboration with Milan-listed FILA has helped them emphasize producing quality materials to fulfil the evolving customer needs.

Quick look at IPOs

Before delving into the financials, it is important to learn that both DOMS and Flair made waves in the Indian IPO market in late 2023 to offer investors a chance to tap into the booming stationery market of the economy. Let’s have a head-to-head analysis of their IPOs:

Listing Date

Flair – December 1, 2023

DOMS Industries – December 20, 2023

IPO Price

Flair – INR 304

DOMS Industries – INR 790

DOMS Industries raised a total of INR 1,200 crore. The issue was a combination of a fresh issue of INR 450 crore and an Offer for sale (OFS) of INR 750 crore. The final issue price was INR 790 per share. Its main objective was to utilise the proceeds from IPO to expand its manufacturing capacity for a wide range of writing instruments, and markers to strengthen its brand presence in the Indian market. It was listed at INR 1,400 per share on the Indian Stock Exchanges which is 77.2% higher than the issue price.

Flair raised INR 593 crore through a fresh issue of INR 365 crore and an Offer for sale of INR 228 crore. The company plans to invest this capital in a new manufacturing facility for writing instruments in Gujarat with a major focus on international expansion. The final issue price was fixed at INR 304 per share and was listed at 503 which is 65% above the IPO price of INR 304.

We can say that both DOMS Industries and Flair IPOs offered unique opportunities for investors, and the long-term success will depend on the company’s ability to execute its growth strategies.

Financial Statement Analysis

Let’s have look at the financial numbers of both the companies (As of March 2023):

Metrics DOMS Industries (in INR crores) Flair (in INR crores)
Revenue 1,086 917
Net Profit 88 111
Fixed Assets 309 201
Current Liabilities 204 155
Investments 475 22
Loans & Advances 1,348 158

Takeaways from the above table are as follows:
- DOMS Industries generally possesses higher revenue and wider market penetration.
- Flair has narrow profit margins because their focus is on affordable pens and competitive pricing and dependence on sales volume.
- Additionally, DOMS has a higher inventory turnover ratio because of its global presence as compared to Flairs which showcases strong sales.
For your knowledge, the inventory turnover ratio (Higher the better) depicts how often a company sells or replaces its inventory over a given period.

Read Also: What is IEPF? Introduction, Reasons for Transfer, and Process of Claiming Explained

Conclusion

Both companies, i.e., Flair Writing Industries Limited and DOMS Industries Limited are excellent choices for stationery and writing needs in India, with their own set of strengths as well as target consumers. Opting between the two completely depends on individual preferences and choices.

Keep in mind that both companies operate in a dynamic market with several influencing factors. Do proper research and seek professional advice to guide you to your perfect stationery match.

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Frequently Asked Questions (FAQs)
1. Which company offers a wider range of products?
  DOMS takes the crown here since the company offers products such as art materials and craft supplies that are far beyond writing.
2. Which brand is more affordable?
  Flair is more affordable than DOMS with competitive pricing across their product range.
3. Who is the market leader in the game of pens?
  Of course, Flair! Flair was established in the year 1976 and has maintained its legacy in the pen market since then. You must have used the Flair pen in your school / college.
4. Which company cares more about the planet and gives back to society?
  DOMS Industries focuses more on sustainability and tries to implement eco-friendly practices while manufacturing products.
5. Which company is leading innovation in stationery-related items?
  DOMS Industries emphasises on quality and premium products whereas Flair prioritizes smooth writing and comfortable grip.

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February 2, 2024

Havells Case Study: Business Model and SWOT Analysis

Havells is a well-known and multi-national electrical equipment company in Noida, India. It is a leading brand in the Indian market known for its quality, durability, and innovation.

The company is a major player in both the Fast-Moving Electrical Goods (FMEG) and power distribution equipment sectors. Havells’s product portfolio is enormous and fulfils the requirements across residential, commercial, and industrial sectors. Currently, it employs almost 6,822 people and has 15 manufacturing units. It was listed on stock exchanges in the year 2001, and since then it has shown persistent growth in its share price. Its share is currently traded at a price of INR 1,620.

History of Havells

Havells holds a rich history. In 1958, seeds of Havells were sown when Haveli Ram Gandhi set up a small electrical trading shop in Delhi. In the year 1971, Qimat Rai Gupta, a distributor of Mr. Gandhi, acquired the company from Haveli Ram and renamed it Havells India Limited. Gupta’s main -focus was on manufacturing rewirable switches and changeover switches. In the 1990s, Havells embarked on a series of strategic acquisitions and expanded its market reach.

Some of the major acquisitions of Havells are as follows:

Year 1994 – ECS – A prominent switchgear manufacturer.
Year 1999 – Standard Electricals – A famous brand for industrial switchgear and motors.
Year 2001 – Crabtree India – A premium brand for electrical accessories.

Products of Havells

Brands of Havells include Lloyd, Crabtree, Standard, Reo, and Havells Studio.

The product portfolio of Havells is as follows.

Switchgear – Domestic Switchgears, Capacitors, Switches, Industrial Switchgears.
Cables – Power Cables, Flexible Cables.
Lighting and Fixtures – Professional Luminaires, Consumer Luminaires.
Electrical Consumer Durables – Fans, Appliances, Water Heaters.
Others – Motors, Solar, Pump, Water Purifiers, and Personal Grooming Products.
Lloyd Consumer – Air Conditioners, Televisions, Washing Machines, Refrigerators.

Business Model & Marketing Strategy of Havells

Havells emphasises research and development for producing and developing safer, smarter, and sustainable products and understands the needs of the consumers. It has built a long-term strategic relationship with the suppliers and focuses on assuring high-quality and efficient product development, which is supported by vertically and horizontally integrated manufacturing along with the in-house operations.

The company adopted an omni-channel distribution strategy that is supported by modern technology. The company ensures fast delivery of goods and services through its strong distribution network.

Havells holds a robust global presence and maintains brand attraction through national advertising, celebrity engagement, digital campaigns, in-shop advertising, etc. Moreover, it provides its customers with after-sales services to maintain long and healthy relationships.

We can say that the company’s major focus is on innovation, digitisation, and talent. It commits to ethical practices, thereby building brand loyalty and positive community relations. Havells has built a resilient and adaptable business model that allows them to navigate market fluctuations and stay at the forefront of the electrical and home appliance industry.

Advertising Campaigns of Havells

Havells had an ad campaign known as “Hawa Badlegi” that has been used for several years. This campaign tackled various social issues, such as gender equality, environmental awareness, etc., with its emotional stories.
#SwitchToHavells was an interactive social media campaign to encourage users to switch from their electrical products to Havells.
‘Havells ka Devas’ campaign was launched, turning 100 Havells fans into a Ganesh idol on a billboard to celebrate the festive spirit.
Some of the famous TV commercials of Havells include #ZindagiKiSharing with Havells Smart Home Appliances, Havells Lighting #HarLightMeinDelight, Havells Water Purifiers (Sahi Paani Ka Sign Havells Alkaline).
Havells’s advertisement campaign – ‘Let’s End Darkness’, was launched with several known faces and highlighted the idea of efficient lighting solutions for homes and offices to dismiss physical darkness.

Havells – Awards & Recognitions

Year 2022

Golden Pin Product Design Award for Freedom Architectural Light.
CII Design Excellence Award for Lloyd Elante Washing Machine.
Design Wall Awards, Platinum Winner, Delhi.
DIA Design Intelligence Award for Vogue Highbay.

Year 2021

India Design Mark 2021 for Silencio Mixer Grinder.
India Design Mark 2021 for Puro Storage Electric Water Heater.
CII Design Excellence Award 2021 for Freedom Adaptable Architectural Light.
Good Design Japan 2021 for Nu Bulb and Lamb.
ICSI CSR Excellence Awards FY 2021-2022.

SWOT Analysis of Havells

The Havells SWOT Analysis highlights its strengths, weaknesses, opportunities, and threats, showcasing its market position and growth potential.

Strengths

Havells offers a wide range of products that includes home appliances, commercial, and kitchen appliances keeping in mind the consumer’s needs and preferences.
Havells has built a strong brand image over the years and is known for quality and reliability in the electronics industry.
Havells’s major focus on innovation accounts for one of the key strengths.
Havells is a global company with a presence in more than 50 countries operating internationally. This provides the company with a diversified revenue stream.
Havells holds a strong distribution network and reaches more than 14,000 dealers in India ensuring market penetration.
Balancing a strong brick-and-mortar network with an omnichannel distribution strategy for easy consumer access.

Weakness

Havells’s high debt-to-equity ratio at 2.44 as of December 2023 is a point of concern about the company’s financial stability.
Increasing competition from other FMEG companies creates pressure on Havells and can impact the market share and performance.
Havells is highly dependent on the Indian market and generates over 70% of revenue, making it vulnerable to economic fluctuations.
Havells has seen a decline in profit margins, revenue, and total assets in the recent annual reports, causing market concerns.

Opportunities

The increasing demand for infrastructure in India can pose an opportunity for Havells to supply electrical and power distribution equipment in the country.

Havells can enter and explore new markets in Asia, Africa, and Latin America for better opportunities.
Development of E-commerce platforms to tap the untouched segment of the market.
Developing and promoting eco-friendly products so that environmental concerns can be addressed will be a great opportunity for Havells to build a brand image.
Havells can also capitalise on India’s ongoing rural electrification drive to target rural customers and increase its product reach.

Threats

Increasing the cost of raw materials such as copper and aluminium can greatly affect production costs and profit margins.
Innovations from competitors can threaten the existing market share and customer base.
Other local brands offering cheaper electrical products, especially in rural areas can be a challenge for Havells.
Changing government policies and regulations related to energy efficiency or foreign trade can impact the business operations of Havells.

Conclusion

Havells success story is exemplary and stands as proof of hard work. The company’s business model is driven by consistent innovation and diversification of the product portfolio. Havells has a wide distribution network to reach various segments of the company. However, a high debt-to-equity ratio and dependence on the Indian market for revenue can be a matter of concern. Careful financial management can help the company mitigate risks and achieve long-term stability.

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Frequently Asked Questions (FAQs)

Who was the founder of Havells?
Qimat Rai Gupta.
Is Havells a listed Company?
Yes, the company launched its IPO in 2001.
In which year Havells acquired Crabtree?
Crabtree was acquired by Havells in the year 2001.
What are the brands of Havells?
Lloyd, Crabtree, Standard, Reo, Havells Studio.
What is the full form of FMEG?
FMEG stands for Fast-Moving Electrical Goods.

January 31, 2024

Tata Motors vs Maruti Suzuki? Analysis of Auto Stocks

Passionate about cars and dreaming of buying a new one but cannot afford it for considerable reasons? No worries, you can still invest in auto stocks. In this blog, we will explore the two well-recognised auto stocks: Tata Motors and Maruti Suzuki.

Tata Motors

Tata Motors is India’s largest automobile company and is a leading global manufacturer of cars, utility vehicles, buses, trucks, and defence vehicles. It was incorporated in the year 1945 and was a part of the Tata Group which was founded by Jamshedji Tata in the year 1868.

Some of the world’s most iconic brands, including Jaguar Land Rover in the UK and Tata Daewoo in South Korea, are part of the automotive operations of the group.

The company is committed to developing innovative and sustainable vehicles for the future of mobility. By operating on a philosophy of ‘giving back to society’.

Maruti Suzuki

It is a well-known company in India and has an intriguing history with the evolution of the Indian Automotive industry. In 1981, the Indian Government established Maruti Udyog Limited which was a joint venture with Suzuki Motor Corporation of Japan.

Maruti Suzuki India Limited is a subsidiary company of Suzuki Motor Corporation, Japan that currently holds almost 58% of the equity of the company. It is one of the largest car makers. The company manufactures and sells passenger vehicles in India and is also the largest exporter of passenger vehicles in India.

The company believes in value creation and connects well with the customers to understand their needs.

Maruti Suzuki vs. Tata Motors – A Comparative Analysis

Both Maruti Suzuki and Tata Motors are leading automobile companies catering to the needs of different segments.

Maruti Suzuki holds a dominant position in the market with a significant market share in the passenger segment. In contrast, Tata Motors has a smaller share but is a leader in the commercial segment.

Market Capitalisation (As of 30 Jan 2024)

Tata Motors – ₹3,15,751 Crore
Maruti Suzuki – ₹3,12,817 Crore

Below is the Tata motors vs Maruti Suzuki Share price

Tata Motors – INR 859
Maruti Suzuki – INR 9,952

Maruti Suzuki has higher profitability and market capitalisation, whereas Tata Motors is facing challenges in the passenger vehicle segment but is profitable in the commercial segment.

Product Portfolio

Tata Motors – Tata Motors offers SUVs like Nexon, Harrier, and Safari. Sedans like Tiago, Altroz, etc.
Maruti Suzuki – The company offers fuel-efficient, affordable, compact Hatchbacks and Sedans such as Wagon R, Baleno, Dzire, Alto 800, Swift, etc.

Trends of the Automotive Industry in India

The automotive industry in India is currently seeing a rapid transformation, driven by several key trends. Some of the ongoing trends are listed below.

1. Electrification

Electrification is undoubtedly the most important trend since the adoption of electric vehicles is consistently increasing due to concerns about climate change and government policies. Experts and industry analysts predict this growth will continue in the coming years.

2. Autonomous Driving

The development of self-driving cars is another major trend. While fully autonomous vehicles are still some years away, at-least in India, advancements in sensor technology and artificial intelligence are progressing each day, which could lead to significant changes in car usage.

3. Connectivity

Cars are becoming more connected and advanced with features like real-time traffic updates, in-vehicle infotainment systems, etc. This trend is being driven by the Internet of Things (IoT) and 5G networks, allowing cars to communicate with each other.

4. Shared Mobility

The rise of ride-sharing services is creating a change in the way people think about car ownership. The car-sharing services are more reasonable, affordable, and convenient alternatives as compared to owning a car. This trend is likely to grow as technology evolves.

5. Sustainability

The auto industry is also focusing on providing consumers with more sustainable vehicles by using recycled materials, and reduced emissions in the manufacturing process. This will eventually improve the fuel efficiency.

Financial Analysis – Tata Motors vs. Maruti Suzuki

Have a look at the table with an in-depth analysis of the recent financial statements of both the companies:

Metrics	Tata Motors (in crores)	Maruti Suzuki (in crores)
Net Profit	INR 3,783	INR 3,706
Revenue	INR 106,758	INR 37,902
Total Assets	INR 336,081	INR 84,596
Current Liabilities	INR 155,027	INR 20,107
Debt-to-equity Ratio	2.77	0.02
PE Ratio	66.90	30.51

From the above table, we can see that:

Tata Motors leads with comparatively higher revenue and high net profits.
Maruti Suzuki, on the other hand, has a much lower debt-to-equity ratio, which implies a stronger and stable financial position.
Both the stocks have relatively high P/E ratios, which reflects the investors’ expectation of future growth.

Impact of Market Conditions on Auto Stocks

During economic expansion or boom, consumer confidence rises and so does their income, leading to a boost in car sales and stock prices.
Lower interest rates can make car loans affordable, which in turn will stimulate the demand for auto sales. Conversely, higher interest rates can reduce borrowing and dampen sales, affecting the stock price negatively.
Fluctuations in fuel prices can have a significant impact on consumer car-buying decisions. Rising fuel prices will boost the sales of fuel-efficient cars.
An upgrade in the technology like the development of electric vehicles can create new opportunities for the auto sector and enhance their stock prices.

Conclusion

Ultimately, choosing between Tata Motors and Maruti Suzuki depends on your investment goals and risk appetite. Risk-averse investors can avoid auto stocks because of their unpredictability in revenue. Keep in mind to do thorough research before making any kind of investment decision and find which stocks best align with your investment needs.

Additionally, remember that auto companies operate in a cyclical industry, which means economic growth can significantly influence their sales volume.

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Frequently Answered Questions (FAQs)

Which brand saves you more at the pump?
Maruti Suzuki is well-known for its fuel-efficient engines.
Who zooms ahead in the race for Electric Vehicles?
Both the auto stocks are actively investing and focusing on EVs and analysing the future growth of this segment.
Is the auto industry a cyclical industry?
Yes, the auto industry is cyclical as sales can be significantly influenced by economic growth.
Are there any other Indian automakers to consider?
There are several other stocks, such as Hero Moto Corp, Mahindra & Mahindra, Eicher Motors, Bajaj Auto, TVS Motors, Ola, etc.
What are the biggest challenges faced by the auto sector?
Some of the biggest challenges the auto sector faces are rising input costs, global shortage of semiconductors, shifts in consumer preferences, etc.

January 31, 2024

HDFC vs SBI? Comparative Analysis Of Banking Stocks

The Banking Sector holds a significant importance in our stock market and economy as a whole. In this blog, we will be doing a comparative analysis of two giants, i.e., HDFC Bank and SBI Bank.

HDFC Bank

HDFC Bank (Housing Development Finance Corporation ) is a leading private sector bank and was incorporated in August 1994 by HT Parekh. It started its operations as a scheduled commercial bank in January 1995.

The bank provides a wide range of financial products and services, such as retail banking, wholesale banking etc. and offers services like loans, credit cards, savings accounts, current accounts, investment products, etc.

As of December 2023, the Bank held 8,086 branches and 20,668 ATMs across 3,836 cities with its headquarters in Mumbai. HDFC Bank has branches in four countries and three representative offices in Dubai, London & Singapore that offer home loan products to NRI citizens and persons of Indian origin. HDFC Bank is listed on the BSE and NSE with the symbol HDFCBANK.

The Bank’s philosophy is based on five core values: Operational Excellence, Customer Focus, Product Leadership, People, and Sustainability.

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State Bank of India

SBI is the largest public sector bank in India and is a titan in the Indian banking landscape with a 1/4^th share in the market. SBI is headquartered in Mumbai and holds a rich heritage of over 200 years.

The roots of SBI trace back to 1806 with the establishment of the Bank of Calcutta, the first joint stock bank in British India. Three separate presidency banks – Bank of Bengal, Bank of Bombay, and Bank of Madras emerged across British India. In the year 1921, the three presidential banks merged to form the Imperial Bank of India.

In the year 1955, the government of India nationalised the Imperial Bank of India and renamed it as State Bank of India. SBI later acquired various state-associated banks and commercial banks.

SBI has played an important role in bringing banking services to rural areas. Currently, SBI holds a strong distribution network of 22,405 branches and 65,627 ATMs.

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Comparative Analysis – HDFC vs. SBI

Dive into the ultimate SBI and HDFC comparison to explore their market strengths, financial ratios, and growth strategies, helping you make an informed choice between India’s top banking giants.

Choosing between HDFC Bank and SBI Bank is a tough task since both are the leading Indian banks, and each has its strengths. The points mentioned below will give you an overview of them (As of 29 Jan 2024):

Market Capitalisation

HDFC Bank – INR 11,04,388 crore

SBI – INR 5,55,823 crore

According to the data by NSE, the weightage of HDFC bank is comparatively more than SBI Bank in indices such as NIFTY and NIFTY Bank.

HDFC Bank – INR 1455

SBI – INR 623

Both banks have their separate growth strategies, but HDFC Bank’s focus on digital adoption might give them an edge in the long run.

Risk Assessment

Analysing key financial ratios can provide valuable insights into the relative risk profiles of HDFC and SBI Bank. Let’s have a glimpse at how the ratios of both banks look like:

Ratio	HDFC	SBI
Net Interest Margin (NIM)	3.65%	2.38%
Debt-to-Equity Ratio	16.79%	13.01%
Non-Performing Assets (NPA)	0.76%	2.78%
Return on Equity (ROE)	15.17%	5.03%
Returns on Capital Employed (ROCE)	3.10%	1.74%
PE Ratio	19.48x	8.40x

As of September 2023

For your reference, the ratios given in the table are explained below:

Net Interest Margin (NIM) – NIM is an important metric for banks since it drives profitability. A higher NIM depicts that a bank can generate more revenue from lending than paying out interest on borrowings. We can say that a high NIM is a sign of a profitable bank.
Debt-to-Equity Ratio – D/E ratio measures how much debt a company is using to finance its assets. A high D/E ratio shows that the company’s major funding comes from debt.
Non-Performing Asset (NPA) – NPA is defined as loans and advances on which interest or principal payment is overdue. Low NPAs show effective credit risk management.
Return on Equity (ROE) – ROE measures the profitability of the company generated from the shareholder’s equity.
Returns on Capital Employed (ROCE) – ROCE measures the profitability of the company from total capital (equity and debt) employed by the company.
PE Ratio – The PE ratio measures the price paid by the investor relative to per share of earnings.

From the above ratios, we can interpret that:

HDFC Bank shows an overall lower risk profile when compared to SBI. On the other hand, SBI benefits from lower leverage and is trading at a cheaper price than HDFC Bank.
SBI vs HDFC profit comparison reveals that both banks have shown robust growth, but their strategies and performance metrics differ significantly.
Further, HDFC Bank has lower NPAs, which showcases better asset quality and lower credit risk compared to SBI.
SBI displays a lower reliance on debt. However, HDFC Bank has delivered significantly higher returns on equity that reflect investor’s interest and value creation.

Financial Statement Analysis

Below mentioned points below will help you with an in-depth analysis of the financial statements of both banks:

Net Profit – HDFC Bank holds an edge with a higher net profit of INR 17,718 crore, whereas SBI’s net profit stood at 16,383 crore.
Revenue – Both the stocks have shown robust growth with HDFC Bank’s revenue standing at INR 115,015 crores, whereas SBI’s revenue stood at INR 144,256 crores.
Total Assets – SBI possesses total assets of INR 5,954,418 crore whereas HDFC Bank INR 2,530,432 crore.
Total Liabilities – SBI exhibits a slightly higher level of borrowings, i.e., INR 5,954,418 crores, compared to HDFC Bank 2,530,432. This could be due to SBI’s broader operations.
Investments – SBI holds a larger proportion of investments with INR 1,913,107 crore as compared to HDFC Bank’s investment of INR 511,581 crores.
Loans and Advances – Both the banks allocate a significant portion of their total assets to loans, with HDFC Bank having a bit less concentration at INR 1,661,949 crores as compared to SBI Bank, which stood at INR 3,267,902 crores.

*All the figures mentioned above are as of the September 2023 quarter.

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Conclusion

Predicting the long-term outlook for any company is inherently a tough task and is uncertain because the long-term perspective is subject to change based on unforeseen factors. However, both banks will benefit from the projected growth of the economy, and since SBI is a public sector bank, it is likely that it may benefit from government initiatives focused on financial inclusion and infrastructure development. Not only this, but also both banks need to manage credit risk and NPAs effectively to ensure sustainable growth.

Last but not least, choosing between the two depends on your risk appetite and investment horizon. Do not forget to diversify your portfolio and consider professional advice to mitigate risks and maximise your returns on investments.

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Frequently Asked Questions (FAQs)

When was HDFC Bank founded?
HDFC Bank was founded in August 1994.
When was SBI founded?
SBI was founded in the year 1921.
Who was the founder of HDFC?
HT Parekh
Which bank has lower NPAs?
HDFC Bank.
What was SBI called earlier?
Imperial Bank of India

January 29, 2024

Paytm Case Study: Business Model and Marketing Strategy

One97 Communications Limited is an Indian multinational technology company started in the year 2000 by Vijay Shekhar Sharma. Paytm, a subsidiary of One97, is an Indian financial services and digital payments company founded in the year 2010.

This case study of Paytm highlights its evolution from a prepaid mobile and DTH recharge platform to a mainstream player with the launch of wallet services in 2014, marking a key moment in enabling cashless transactions for users.”

Today, Paytm stands as a one-stop-shop for consumers, offering a plethora of financial and other services that include e-commerce, banking, investments, loans, bus tickets, money transfers, etc.

The business model of Paytm has driven its total revenue growth from ₹2,802 Cr in FY 2021 to ₹7,990 Cr in FY 2023, achieving a CAGR of 69%.

In 2017, Paytm piloted bill payment services in Canada and in the year 2018, Paytm partnered with Softbank and Yahoo Japan Corporation to launch PayPay, a leading digital payments and financial services company in Japan.

Paytm went public with its IPO on NSE & BSE in November 2021 and raised INR 18,300 crs via IPO. The IPO was one of the largest in India, although Paytm’s debut in the stock market faced mixed reactions.

As of September 2023, there is no identifiable Promoter of Paytm. Have a look at the shareholding pattern of Paytm:

Products and Services of Paytm

Paytm offers a variety of products and services, such as payment services, financial services, cloud, etc.

Payment Services

Payment Services are meant for both consumers and merchants and enable them to make and receive payments seamlessly both online and in-store. Paytm has an overall market share of 40% in payment transactions. Paytm also launched the Paytm Wallet in 2014 and QR code services in 2015. QR Code was later upgraded to an All-in-One QR code in 2020 so that consumers and merchants can have a seamless payment experience while accepting payments from third-party UPI platforms.

Further, in 2020, Paytm launched soundbox service that gives real-time payment audio confirmation for payment completion. With Paytm’s payment services, consumers can make online bill payments, recharge, and transfer money through the app.

Commerce & Cloud Services

Paytm allow consumers to avail of lifestyle commerce services that include booking online tickets, entertainment, gaming, and food delivery within the Paytm app. Merchants can also connect with consumers to improve their business operations. Paytm provides merchants with services such as billing, ledger, vendor management, inventory management, catalogues, etc.

Paytm also provides software and cloud services to enterprises, telecom companies, digital and fintech platforms.

Financial Services

Paytm provide the following financial services to consumers and merchants:

Mobile Banking Services – Paytm provides mobile banking services through Paytm Payments Bank that includes digital banking products such as current accounts, savings accounts, salary accounts, fixed deposit accounts, and debit cards for individuals, SMEs and corporates.

Lending – Paytm collaborates with financial institutions to improve distribution, underwriting and collections and provide seamless access to loans to consumers and merchants. Paytm also launched the Paytm Postpaid, which is a buy now pay later (BNPL) product.

Insurance and Attachment Products – Paytm in collaboration with its insurance partners, provides attachment products like movie and travel ticket cancellations protection. Paytm’s subsidiary company, Paytm Insurance Broking Private Limited provides insurance services that include auto insurance, life insurance and health insurance.

Wealth Management – Paytm provides wealth management services to consumers through the Paytm app and Paytm Money App. It also launched Paytm Gold, which allows customers to buy digital gold on their platform. Paytm Money app offers investment in mutual funds, equities, and derivatives trading.

Awards & Recognitions of Paytm

Paytm has received multiple awards and recognitions. Some of the major recognitions are:

BrandWagon Ace Award for best social media campaign in 2020.
ET BFSI Excellence Award for Best Digital Bank of the Year in 2020.
India Digital Award by IAMAI for Best Fintech Growth Story and Best Data-Driven Marketing Strategy in 2021.
FinTech India Innovation Awards 2023 for Best Fintech Company of the Year in 2022.
8th CFO Vision and Innovation Summit & Awards 2023 for Best Fintech Company of the Year.
Quantic 4th Annual BFSI Excellence Awards 2023 for best Wealth Management Company of India.

Advertising Campaigns

“Kar De Paytm” in the year 2010.
“Zindagi jeene ka naya tarika shuru karo – Paytm Karo” in the year 2015.
“ATM nahi, Paytm Karo” in the year 2016.
“Dimag Khul ke Jee” in the year 2017.
“India Kahe Paytm Karo” in the year 2022.

Competitive Advantages of Paytm

Paytm was an early entrant into the digital payments landscape and had a first-mover advantage.
Paytm has a wide market of payment services across India with a brand value of US $6.3 billion.
Paytm builds and innovates its technology which helps it to launch products and services rapidly with a high success rate. Paytm has a technology team of over 2,500 members that continuously works to improve the user experience.
Paytm tries to understand the needs of its users and innovates products accordingly.
To engage with customers, Paytm invests in marketing campaigns and other promotional offers.

Growth Trajectory of Paytm

Paytm has shown an impressive growth and expansion journey over the years. It has evolved from a mobile recharge platform to a financial services powerhouse. It claims to have more than 300 million active users. Paytm’s strategic partnerships with HDFC Bank, Uber, Indian Railways, and major E-commerce platforms have helped the company to grow over the years. Cashback and Promotional offers still attract new customers and hold the existing ones. Paytm has moved beyond payment services and has ventured into travel, wealth, credit cards, loans, etc.