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Informist, Wednesday, Feb. 5, 2025

By Aman Aryan

MUMBAI – Despite incurring a one-time loss of INR 592.8 million in the December quarter, Info Edge (India) Ltd. posted the strongest sequential growth in net profit in seven quarters, primarily on account of a low base. The company had reported INR 2.60 billion of deferred tax outgo for the previous quarter due to changes in long-term capital gain tax norms, which had taken the net profit for that quarter below INR 1 billion. 

The internet holding company's net profit more than doubled to INR 2 billion during the December quarter, but missed the Street's expectation of INR 2.55 billion. Info Edge incurred a one-time loss on account of a provision made for diminution in the carrying value of non-current investments. Excluding this exceptional item, the company's net profit tripled on a sequential basis, which beats the consensus view. 

However, the top line performance of the internet services company resembled the muted growth in its billings during the quarter. Info Edge's revenue grew just over 2% sequentially to INR 6.72 billion, similar to the 2.8% sequential growth in its billings for the quarter. The company's billings were at INR 6.68 billion in the December quarter. On a year-on-year basis, the company's revenue grew 13% while its net profit fell 6% during the December quarter.

The internet services company's revenue grew due to a consistent performance across all four verticals. Its recruitment solutions segment reported revenue of INR 5.05 billion for the December quarter, up 2% from INR 4.95 billion in the previous quarter. Revenue from the 99acres vertical for the quarter was INR 1.04 billion, marginally higher than INR 1.02 billion in the previous quarter. Info Edge's other segment, which includes education and matchmaking, generated revenue of INR 624 million, up 5% from INR 592 million in the previous quarter.

Its recruitment segment's operating profit rose 4% sequentially to INR 2.98 billion and the cash from operations grew 15% to INR 3.33 billion for the December quarter. Its operating profit margin expanded by 110 basis points to 58.9% during the quarter under review, according to the company's investor presentation. Information technology and information technology enabled services accounted for 31% of the segment's revenues.

The recruitment segment's revenue was INR 4.51 billion in the year-ago quarter. For the latest quarter, its operating profit rose 14.8% on year and the margin improved by 130 basis points on year.

On the other hand, its non-recruitment businesses are nearing break-even, Info Edge said. The real estate segment reported 66% contraction in loss for the December quarter. The segment's loss for the quarter was INR 48.16 million, down sharply from a loss of INR 141.9 million in the previous quarter. During Oct-Dec, 99acre's customer base rose over 3,000 to more than 85,500 as at the end of the latest quarter. Revenues from the 99acres segment was INR 887.6 million in the year-ago quarter.

However, the other segment's loss expanded during the quarter under review to INR 78 million from INR 40 million in the previous quarter. Its Jeevansathi platform booked 8% sequential growth in billings during the quarter. For the nine months ended December, its operating losses have come down 81% on year, led by a 27% on-year contraction in marketing spend for the period. The company's overall advertising and promotion spends have fallen 3% on year and 12% sequentially to INR 667 million for the December quarter.

The company improved its operating profit margin by 250 bps on year to 39.2% during the quarter. Info Edge registered on-year growth of 20.4% in its operating profit, which was INR 2.63 billion in the December quarter. The company generated INR 3.46 billion cash from operations during the quarter, up 27% on year. As of Dec. 31, its cash balance was INR 42.90 billion, the company said. 

The carrying value of Info Edge's investments in listed entities--Zomato Ltd. and PB Fintech Ltd.--was INR 7.22 billion as of Dec. 31. The company holds over 12% stake in both companies. It also has 21 active financial investments in unlisted entities with a total book value of INR 6.35 billion, according to the investor presentation. It also had strategic investments in seven entities with an aggregate carrying value of INR 3.67 billion as of Dec. 31, the company said.

Info Edge said its board had approved investing INR 10 billion in IE Venture Investment Fund III, an alternative investment fund scheme by Karkardooma Trust. The fund is yet to receive a registration certificate from the market regulator. Info Edge's wholly-owned subsidiary Smartweb Internet Services Ltd. will act as the sponsor and investment manager of the trust and all its schemes, the company said in an exchange filing. 

The company's board also approved the amended scheme of amalgamation among the company and some of its wholly-owned subsidiaries. The amended scheme includes another wholly-owned subsidiary, Allcheckdeals India Pvt. Ltd., along with Axilly Labs Pvt. Ltd., Diphda Internet Services Ltd., and Zwayam Digital Pvt. Ltd.  

The company's consolidated net profit for the quarter was INR 2.43 billion, up from INR 232.59 million in the previous quarter. In the previous quarter, the company had incurred a loss of INR 875 million from its joint ventures, and had also booked a one-time tax outgo of INR 3.21 billion on a consolidated basis. Its consolidated revenue rose 3% sequentially to INR 7.22 billion. For Apr-Dec, the consolidated net profit fell 3% on year to INR 4.99 billion, while its consolidated revenue rose 12% on year to INR 21 billion.

For the nine months ended December, the company's net profit has fallen 17% on year to INR 5.18 billion. However, its revenue for the period has risen 11% on year to INR 19.67 billion.  End

Edited by Avishek Dutta

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