INFO EDGE (INDIA) LTD - SUSTAINED GROWTH MOMENTUM ON THE BACK OF BROAD-BASED BILLINGS GROWTH

News: Info Edge's revenue in Q1FY25 increased by 5% QoQ/9.3% YoY to ₹638.9 crore. Naukri revenues were up by 4.2% QoQ/5.6% YoY to ₹471.5 crore while revenue for 99 acres increased 6.7% QoQ/19.5% YoY to ₹98.8 crore. Other verticals grew 8.2% QoQ/24.1% YoY to ₹68.6 crore led by Jeevansathi & Shiksha which reported 8.3% and 8.2% QoQ revenue growth to ₹26.2 crore and ₹42.4 crore respectively. Billing for recruitment business was up 8.5% on YoY basis while that of 99 acres was up 10.2% on YoY basis. Billing for Jeevansathi was up 35.1% at ₹25.4 crore. EBITDA margins declined by ~160 bps QoQ to 39% while absolute EBITDA was up by 1% QoQ.  EBITDA margins for recruitment business were down ~300 bps QoQ to 54% (primarily due to IPL campaign costs) while EBITDA losses in 99 acres and Jeevansathi business have contracted further. InfoEdge reported net profit of ₹232.3 crore vs reported profit of ₹223.5 crore in Q4FY24.

View: Billings on a YoY basis grew in a broad-based manner due to increased momentum in the Jeevansathi business which saw billings grow by 35.1% YoY. The recruitment business also saw healthy growth in the non-IT segment (in Tier2/3 cities) with a 14% increase in billings while growth in IT billings moderated to mid-single digits (which is positive but not yet stabilized). The recruitment consultant segment saw billings growth after four consecutive quarters of decline and the company plans on increasing the advertising spend for this business. 99 acres YoY billing grew on the back of strong improvements in both the no. of billed customers and average billing per customer, however quarterly billings were impacted by elections and muted new project sales. Matrimony business (is near breakeven) saw healthy growth in its YoY billings on the back of reduced marketing expenses & losses and continued focus on monetising platform traffic in additional ways & launching new features. Shiksha saw continued healthy growth along with improvement in operating profits. The management highlighted an expansion opportunity for Shiksha due to emergence of new private universities in India. Overall, the company witnessed YoY growth but sequential growth shall return in a few quarters. We maintain a cautious view on the company.

Impact: Neutral