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Informist, Thursday, Jan. 30, 2025

By Rajesh Gajra

NEW DELHI – The top line performance of the internet services company Info Edge Ltd. is expected to resemble the billings growth. Info Edge Ltd.'s billings growth in the December quarter was muted sequentially and moderately higher in double-digits on a year-on-year basis. The company had reported its billings numbers for the December quarter on Jan. 6.

The bottom line growth of the company, adjusted for extraordinary items, will largely track the revenue growth. Sequential growth of net profit for the December quarter will be aided by a lower base that was deflated due to exceptional items pertaining to revised valuations from the declassification of investment in joint venture to investment in financial instruments upon loss of control.

The company's billings were up 2.8% on quarter to INR 6.68 billion in the December quarter. However, the year-on-year growth in billings was higher at 15.8%. The recruitment solutions segment accounted for nearly 74% of total billings, real estate vertical 15.3%, and others made up for 10.7%.

According to the average of estimates by seven brokerage firms, Info Edge's revenue for the December quarter is seen at INR 6.82 billion, up 4% sequentially and 14.6% on year. Among the revenue estimates, JM Financial Institutional Securities' INR 6.76 billion was the lowest and HDFC Securities' INR 6.91 billion the highest.

The brokerages' average estimate for the company's net profit is INR 2.55 billion, up 2.9 times sequentially and 19.6% on year. Adjusted for exceptional items of the previous quarter, the sequential growth will likely be 29% higher. The net profit estimates range from a low of INR 2.51 billion by Motilal Oswal Financial Services to a high of INR 2.63 billion by Nuvama Wealth Management. The earnings before interest, tax, depreciation, and amortisation is seen at 2.84 billion, as per an average of estimates by six brokerage firms.

In the September quarter, Info Edge had reported a 2.7% sequential and 10.6% on-year growth in revenue to INR 6.56 billion, while the company's net profit had fallen 63% on quarter and 59% on year to INR 859 million. The operating profit had gone up by 14.8% on year to INR 2.51 billion during that quarter.

Info Edge's revenue growth in the December quarter will be driven by its recruitment segment with the outlook for freshers hiring improving, HDFC Securities said in its preview report. The brokerage said the information technology sector hiring is showing signs of recovery with growth picking up and there was steady hiring activity in sectors like banking, financial services, and insurance, and travel.

EBITDA margin of the company will likely be 42.5%, up 50 bps on quarter, according to Kotak Securities' institutional equities team. Motilal Oswal said the real estate segment 99acres and marriage segment Jeevansathi "are nearing break-even levels with profitability anticipated in FY26." However, the real estate vertical is anticipated to face some uncertainty due to the low inventory of unsold projects in major metros and moderated new project sales, Motilal Oswal said.

The company will declare its financial results for the December quarter on Wednesday. Post-announcement, the company's outlook on IT hiring will be keenly monitored, according to Motilal Oswal.

At 1226 IST, shares of Info Edge traded 1.1% higher at INR 7,715 on the National Stock Exchange of India. At the current price level, shares of the company are down 2.4% from the Nov. 7 closing price of INR 7,903, a day prior to the September quarter earnings disclosure.

Following are the Oct-Dec standalone earnings estimates for Info Edge (India) based on reports from seven brokerage firms in descending order of estimate of net profit:

End

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

Edited by Akul Nishant Akhoury

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