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Informist, Wednesday, Oct. 23, 2024

By Narayana Krishna

HYDERABAD - Info Edge (India) Ltd. is expected to report healthy revenue growth for the September quarter, supported by the strong performance of its core recruitment business, primarily driven by Naukri.com, analysts said. The New Delhi-based online classifieds company, catering the recruitment, matrimony, real estate, travel and education sectors is expected to report a 16.4% year-on-year growth in its September quarter net profit to INR 2.4 billion, while its revenue is seen growing 11% on year to INR 6.6 billion, according to an average from six brokerages. For Jul-Sept last year, Info Edge reported a net profit of INR 2.1 billion on revenue of INR 5.9 billion.

Analysts' estimates for Info Edge Jul-Sep net profit range from INR 2.4 billion, the lowest by brokerage Nuvama Wealth Management, to INR 2.5 billion, the highest by HDFC Securities. The estimates for revenue range from INR 6.5 billion, the lowest by HDFC Securities, to INR 6.6 billion, the highest by Motilal Oswal Financial Services.

In its quarterly updates submitted to the stock exchanges, Info Edge reported a 14.3% year-on-year growth in its Jul-Sept billing to INR 6.5 billion.

While overall growth is aided by the recruitment segment, driven by non-information technology sectors, the hiring trend in the IT sector has been relatively slow till recent months, analysts said. However, early signs of recovery is visible.

Sequentially, the company's net profit is seen growing 4.6% and revenue seen increasing 3%, supported by decreasing losses in its real estate platform 99acres and matrimony platform Jeevansathi, analysts said. For Apr-Jun, Info Edge reported a net profit of INR 2.3 billion on a revenue of INR 6.4 billion.

According to HDFC Securities, the recruitment segment is likely to see billings growth of 14% on year, the highest in six quarters, benefiting from improving hiring activity across various sectors such as banking and financial services and travel.

Kotak Institutional Equities anticipates 8% year-on-year and 4.5% sequential growth in revenue from Naukri, with a notable 15% on-year rise in 99acres, which reflects recovery after a period of slower growth. Education vertical Shiksha and Jeevansathi segments are also projected to perform well, with year-on-year growth rates of 33.4% and 21.8%, respectively, Kotak Institutional said.

Kotak Institutional expects the company's overall earnings before interest, tax, depreciation and amortisation, or EBITDA, margin to improve to 41%, with Naukri's EBITDA margin maintaining strength at 57%, though slightly below last year's levels.

According to Motilal Oswal, the recruitment vertical is set for steady growth, driven largely by non-IT sectors, while the real estate vertical is expected to bounce back after facing temporary slowdowns during the election period.

Nuvama Wealth also sees robust growth for the non-recruitment businesses, anticipating a 2.6% sequential increase in overall revenue. Nuvama Wealth projects the recruitment business to expand by 4.0% on quarter and 7.5% on year, with a 100 bps rise in EBITDA margin sequentially.

Analysts have pegged Info Edge’s EBITDA margin estimates between 40.8% and 42.2% for the quarter, with a slight sequential improvement across the board, driven by stable recruitment growth, reduced losses in other segments, and recovery in sectors like real estate and non-IT hiring. The average of estimates of four brokerages available for Info Edge September quarter EBITDA is pegged at INR 2.7 billion, with estimates ranging between INR 2.6 billion and INR 2.8 billion.

The company is scheduled to announce its Jul-Sept earnings on Nov 8. Market participants would watch out for the company's expectation on possible IT-hiring segment growth besides real-estate growth expectation for the full year. 

At 1404 IST, shares of Info Edge India traded at INR 7,906.90 on the National Stock Exchange, up 3.4%
from its previous close. 

Following are the Jul-Sep earnings estimates for Info Edge India from five brokerage houses:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Manisha Baxla

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