Info Edge (India) reported good Q2FY24 results with hiring across other segments helping offset weak IT performance.<\/p>\n
The revenue increased 11.5 per cent year-on-year (Y-o-Y) to Rs 593 crore, (up 1.5 per cent quarter-on-quarter or Q-o-Q).<\/p>\n
The earnings before interest, taxes, depreciation, and amortization (Ebitda) margin was excellent at 40.7 per cent, up 200 basis points year-on-year (Y-o-Y).<\/p>\n
Overall, the billings were up 4.8 per cent Y-o-Y to Rs 570 crore.<\/p>\n
Management guidance continued to be cautious with a slowdown in IT hiring affecting the recruitment business.<\/p>\n
Non-IT hiring has been doing well for the past two quarters with expansion into small towns.<\/p>\n
The jobs portal has 94 million resumes by the end of September, adding 3 million resumes in Q2FY24.<\/p>\n
Travel, hospitality, and oil and gas verticals showed improved hiring traction.<\/p>\n
The real estate business in 99acres posted robust revenue growth of 25 per cent Y-o-Y and 5.6 per cent Q-o-Q to Rs 87 crore.<\/p>\n
The sector is expected to continue to do well.<\/p>\n
However, due to marketing spending remaining high, there could be continued losses for 99acres in the near term.<\/p>\n
The number of listings on the 99acres platform decreased by 2.5 per cent Q-o-Q to 1.134 million, but there was an increase of 21.8 per cent Y-o-Y in 99acres billing.<\/p>\n
The 99acres turned cash-flow positive in Q2FY24 whereas it suffered cash losses in the year-ago period.<\/p>\n
A change in business strategy to freemium for the matrimonial portal, Jeevansathi.com, seems to have led to better engagement levels and should drive revenue growth.<\/p>\n
Revenue grew 16.7 per cent Y-o-Y to Rs 19.7 crore.<\/p>\n
The operating loss stood at Rs 17.5 crore versus a loss of Rs 27.6 crore Y-o-Y. Shiksha, the education segment, has also seen strong traction.<\/p>\n
Billing grew 3.7 per cent Y-o-Y to Rs 25.7 crore while revenues were Rs 30 crore (up 15.9 per cent Y-o-Y).<\/p>\n
The company will continue to make long-term investments in the study abroad segment and focus on improving counseling services.<\/p>\n
The Adjusted PAT was at Rs 213.7 crore versus Rs 168.1 crore (Y-o-Y) and Rs 200 crore (Q-o-Q).<\/p>\n
The strong operating margin was positive indicating lower dependence on the advertisement.<\/p>\n
Growth could slow in FY24 and FY25, however, which may limit the upside on margins.<\/p>\n
A pullback to a margin of 38 per cent in FY25 is possible. Scale benefits may kick in, however, and 99Acres could go into the black in FY25 if real estate maintains momentum.<\/p>\n
The company remains the market leader in recruitment and a strong player in real estate classifieds.<\/p>\n
Investors will also look at its holdings in Zomato and Policybazaar where valuations have improved.<\/p>\n
Info Edge has always received high valuations, however, and it may be close to fair value.<\/p>\n
Recommendations range from “neutral” to “hold” to “add”.<\/p>\n