India is still learning how to invest in platform or internet companies, according to Itus Capital Advisors Pvt.’s Naveen Chandramohan. He suggests to look at such businesses based on cash flows, not the path to profitability.
Some of these companies will be understood over a period of time, the founder of the portfolio manager, managing assets worth more than Rs 700 crore, told BloombergQuint’s Niraj Shah during a BQ Edge event. Developments over the medium term, he said, may compel Itus to change its views on platform companies.
Itus Capital is still working on PB Fintech Ltd., the parent of Policybazaar, to “understand it better” even as the online platform for insurance and lending products has been listed for more than six months, he said.
Chandramohan is optimistic on Nykaa. The beauty products platform is “different” than other companies as it has a “warehousing model” that helps it clock a higher margin, he said. The developments in the offline and fashion segments, according to him, will determine the route of growth.
Chandramohan, however, isn’t upbeat on the changes in Zomato Ltd.’s business model, especially with some of the new investments being made by the promoters. He hopes that the food aggregator will be able to do well in the medium term.
Watch the full interview here:
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