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Indias internet companies could deliver stronger-than-expected revenue growth in the coming quarterly results despite tight funding conditions and intense competition, according to a report by Morgan Stanley, which said overall demand remained resilient.
The report said the Indian internet market had held up despite concerns over rising interest rates and other macroeconomic pressures. We see room for top-line surprises in the coming quarterly results, Morgan Stanley said, pointing to the possibility of companies reporting better revenue performance than expected. However, the report highlighted growing differences in the performance of companies operating in the same segments, with businesses demonstrating stronger execution attracting higher valuation premiums. Indias internet index fell 5 per cent over the month before the report, following gains over the preceding three months. The report said sharp differences in share-price performance were visible in food delivery, quick commerce and logistics, reflecting differences in earnings performance and market expectations. Funding remains a key challenge for the sector. Internet companies raised USD 299 million in September 2026, down 37 per cent from August and 52 per cent from a year earlier. The month recorded 35 funding deals, compared with 36 in August and 39 in September 2025. No large deals were recorded during the month. Morgan Stanley said the funding environment remained tight, with investment increasingly concentrated in early- and mid-stage companies and fewer late-stage deals. E-commerce and health and fitness attracted the most interest in September, while fintech, e-commerce and enterprise technology accounted for the largest share of investment interest year-to-date. Competition is also reshaping market shares across internet businesses. The report noted that Blinkit continued to lead in app downloads in quick commerce, while Toing was gaining traction in food delivery. Private companies were also narrowing the gap with Urban Company in the home services segment, based on monthly active and daily active user data tracked by the firm. The report said the Indian internet market remained resilient, but sustained performance would depend on companies ability to execute amid competition and limited access to capital. Differences in earnings delivery and market-share gains are likely to remain important factors shaping the sectors performance in the coming quarters. (ANI)
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