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What’s trending at stock analytics firm Trendlyne?

By Maulik M

  • 05 Jan 2023
What’s trending at stock analytics firm Trendlyne?
Credit: 123RF.com

It is a stock analytics company. It caters to both institutional and retail clients. To top it all, it is a profitable venture, unlike several other tech startups. Reasons enough for Trendlyne—founded by first-time entrepreneurs Amber Pabreja and Devi Yesodharan in 2017— to be a one-stop shop for stock market investors. 

The company’s business-to-business (B2B) customers account for 60% of its client base, and include brokerages such as HDFC Securities, Motilal Oswal, ICICI Securities and IIFL Securities. That’s possibly one reason why Trendlyne is profitable. “Trendlyne became Ebitda positive in FY2022 and that trend is continuing," says Yesodharan, co-founder and chief marketing officer.  

In an interview with Mint, Yesodharan, and Pabreja, founder and chief executive officer, talk about their flagship products—stock screeners and Alpha Alerts. Trendlyne is all set to enter international markets. It is also gearing up to enable transactions on its website and app.  

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Edited excerpts from the interview. 

Give us a brief overview of Trendlyne 

Yesodharan: We are a stock analytics company that caters both to B2B and B2C (business-to-consumer) customers. That has been our identity from the start. We haven’t done transactions on the website and the app. That’s going to change this year as we are introducing a couple of transaction products. 

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The first product we launched was stock screeners. With this, you can screen stocks using system queries. You can build your own screeners as well. Then we launched the DVM (durability, valuation and momentum) stock score. This basically gives a score for every stock across financial quality, valuation and momentum. 

The Indian market has a lot of news and tips. But how does a retail investor get enough time to scan a stock in detail— look at the financials and the management, check if there have been auditing issues, or if the valuation is too expensive. So, we have tried to give this information based on these three scores on top. And that has proved to be extremely popular with users because not only does it help one find stocks with a potential upside, you can also avoid investing in stocks with a sharp downside risk. For example, there are many startups that have listed recently . Their scores clearly show that these are extremely loss-making ones. There is no manual interference and it’s completely an automated rule-based scoring. 

Our business model has been to build analytics products that have a clear moat in the market. For example, we are the only player in India that does back-testing on a query level. So, you can write a query for a screener, saying I want to look at stocks having a certain revenue and profit growth, and run a screener and then back-test it to see if it has actually performed well, historically. 

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Our ‘Alpha alerts’ have also proved to be quite popular. You can set real time alerts on corporate announcements, bonus splits, target prices, celebrity investors buying stocks, etc. A lot of unstructured and structured data is part of our alerting mechanism. What is unique about alpha alerts is their sheer range. 

One can get screeners and alerts from other sources too. Why come to Trendlyne? 

Yesodharan: What is different about our screeners, for example, is that we have the largest parameter base in the industry. We have around 1,200 parameters on which you can run a screener. A lot of other websites and apps, screener.in is an exception, take these parameters from external vendors like Refinitiv, for example. So, they have a limited set of data. 

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We build our own data feeds and that makes us somewhat unique in the market. We don’t just take data feeds from financial market data vendors such as CMOTS and Dion. We are able to provide alerts based on unstructured data. For example, you can set a real-time alert for results declared where the net profit growth has been greater than zero for all your portfolio watchlist stocks. 

Pabreja: Let me give you an example. We have a data feed on FII (foreign institutional investors) and DII (domestic institutional investors) and it is a combination of about seven to eight sources. That lets you analyse the entire FII and DII activity in the market. We compile the trading data from various corporate filings, and provide it in a consolidated way. Also, there are many scanned PDFs in the corporate filings. Trendlyne allows you to search within these documents using keywords. 

How has your business grown since launch in terms of user base monetization, etc. 

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Yesodharan: We launched our first product, a screener, in mid-2017. We gave it out for free for around a year. We weren’t trying to monetize and were trying to figure out the business model. We have grown fairly rapidly. For example, over the last year, we had 350 million page views, annualized. Over the last 12 months, we had around 11 lakh unique users coming to our website and app every month (all B2C). We are a profitable startup and we haven’t used a lot of the funds we raised. 

We started out in India but we have always wanted to be a multi-geo startup. The advantage of launching in the Indian market is that the exchange fees, especially for delayed data, and vendor fees for data feeds to build these analytics products is relatively low. So, we were able to build a fairly mature suite of products for India, which we are now taking to the US, the UK and Canada markets in March. We became Ebitda positive in FY2022 and that trend is continuing in FY2023. 

How much of your business comes from B2B and B2C clients? 

Yesodharan: When the markets are up, we tend to be 50:50 on B2B:B2C. Since the markets turned volatile, we gained a large number of B2B customers, and this is around 60:40 now. We have around 21 B2B customers, primarily brokerages, in India such as HDFC Securities, Motilal Oswal, ICICI Securities, IIFL Securities, and PhonePe and 5paisa. They primarily take our analytics, and we also have revenue-sharing offerings like portfolios provided to them. You would have seen a big change over the last couple of years in terms of how brokerage apps look—earlier, they were very transaction driven, now you see screeners and fairly detailed analytics on these apps. We are powering a lot of this for our customers. 

Will your international market entry impact your profitability? 

Pabreja: Yes, for a couple of years, and that why we raised funds. We haven’t spent any of our pre-series A funding which we raised about one and a half years ago because we remain profitable. 

The India geography is self-sustaining, and can actually power the transactional products also. But then we didn’t know how the next few years were going to be and that’s why we raised series A funding. 

The target audience will be the US, the UK and Canada residents. The market size is about nine times that of India and the paying capacity is also approximately four to five times larger. So, the opportunity is huge, like 20x-30x. 

Are your subscribers essentially users of fundamental stock analysis? 

Yesodharan: They used to be primarily long-term investors, but we have launched a bunch of products for technical investors as well. We pushed a lot of technical parameters into our screener system for traders. We have a futures and options dashboard and analytics, and we are building that out considerably. So, we have started seeing more subscribers coming from this space. 

Do you have an in-house research team? 

Yesodharan: We are still a majority tech company. But over the last two years, we have built a content and research team. So now we have around 10 people, a couple of them are registered analysts and are writing and building screeners for us. We have fairly detailed analysis going on as well on the content side. We don’t give any recommendations. 

Everything that is on the website right now has no person behind it, unless you’re looking for something like resignation of management and other such details where you have somebody auditing it to make sure it’s correct. 

Are you integrated with any execution platforms? Can your registered users execute a Trendlyne strategy with their broker seamlessly? 

Yesodharan:That’s one of the transaction products that we are launching, hopefully this year. So, till now users have not been able to execute their screeners and trades on Trendlyne. We are making a trading gateway available for investors to do that. 

The other product that we are launching is a baskets product. So, for example, you can build a screener on Trendlyne and convert it into a basket of stocks for trading via a broker. This is a smallcase-like product, but it’s not smallcase. We have built it completely by ourselves. It has some differences from smallcase; for example, you can do an equity plus mutual fund basket using this particular product. 

Pabreja: The product is called GroBox and it is already live as a white label product. We are using the opportunity of a soft launch with IIFL to make sure that the product works well end to end. You will soon see it being launched with five brokers.

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