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Informist, Monday, May 26, 2025

By Rajesh Gajra

NEW DELHI – A 10-quarter high billings growth on a year-on-year basis is likely to have propelled the revenue growth of Info Edge (India) Ltd. in the March quarter, with operating profit growth seen supporting the bottom line performance of the company. Analysts expect some improvement in IT hiring to have taken place in the March quarter, which will likely positively impact Info Edge's earnings since the company's recruitment business, through Naukri, makes up for a chunk of the total revenue and operating profit.

The March quarter bottom line of the technology-driven, internet-based quick commerce company will also likely have been favourably impacted on account of lower operating losses in real estate, matrimonial, and other segments of the company, where substantial investments and other costs had led to operating losses. The real estate segment, through 99acres, had seen investments taper a couple of quarters ago and the company had begun to have operating leverage in the business. But competitive intensity in the real estate may still challenge the dynamics of the segment, according to Info Edge management's comments at the earnings conference call with investors in February.

The company's on-year revenue growth has been on an upward trajectory, having risen consecutively in the previous four quarters. Analysts expect this upwards trajectory in revenue growth to continue in the March quarter.

Info Edge will likely report a 26% on-year rise in standalone net profit to INR 2.65 billion in the March quarter, on the back of a 15% increase on year in standalone revenue from operations to INR 6.98 billion, according to the average of estimates by seven brokerages. The net profit estimates vary from INR 2.54 billion by Centrum Broking to INR 2.79 billion by Motilal Oswal Financial Services.

The lowest estimate for revenue is INR 6.91 billion by Nuvama Wealth Management and Kotak Institutional Equities and the highest is INR 7.17 billion by JM Financial Institutional Securities. The company will likely report an earnings before interest, tax, depreciation, and amortisation of INR 2.99 billion, according to the average of estimates by six brokerages.

In the December quarter, Info Edge reported a standalone net profit of INR 2.00 billion, down 6.3% on year, while its revenue from operations increased 13% on year to INR 6.72 billion. Monday, shares of Info Edge ended 1% down at INR 1,473.50. At the current price level, the company's shares are down 4.4% from INR 1,541.38 on Feb 4, the session prior to the December quarter earnings announcement. There are eight buy recommendations by brokerages for Info Edge at an average target price of INR 1,558, and two hold recommendations at an average target price of INR 1,500.

Billings growth in the March quarter would have weighed favourably for the top-line growth of the company. The billings in the March quarter increased 19% on year to INR 9.84 billion, according to the quarterly billings update provided by the company on Apr 8. The recruitment billings rose 18% on year to INR 7.40 billion, while the real estate business billings jumped up 22% to INR 1.60 billion in the March quarter.

The company will likely have seen steady growth in the recruitment vertical driven by the non-IT segment, according to brokerage Motilal Oswal. "That said, we believe IT services still account for the lion's share of hiring and are critical to a sustained turnaround" for the company, it said.

The company's recruitment growth was likely broad-based across IT as well as non-IT sectors in the March quarter, according to JM Financial. Kotak Institutional Equities division sees the Naukri business of Info Edge reporting 14% on-year revenue growth and 99acres reporting 15% revenue growth year-on-year.

Kotak estimates Naukri's EBITDA margin at 60% in the latest quarter. It also expects Info Edge to report an operating profit in the 99acres business against an operating loss a year ago. The 99acres business EBITDA margin will likely be 2.8%, Kotak said. The company's EBITDA will likely jump up 25% on year to INR 3 billion with a 181 basis points on-year expansion in margin to 42.4%, ICICI Securities said in its preview note.

The company will announce its March quarter earnings Tuesday. Post-announcement, investors will follow the management's commentary on the outlook for FY26 and the expected trajectory in IT and non-IT hiring.

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

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Edited by Saji George Titus

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