News: Info Edge Q3 numbers were much ahead of our estimates on margins. Revenue increased by 4.4% QoQ to Rs 555.2 crore. Naukri business (79% of mix) reported revenue of Rs 436.8 crore (+4.5% QoQ & +40.3% YoY) while billings for the business came at Rs 434.6 crore (+2.1% QoQ & 17.7% YoY). 99 acres (13% of mix) reported revenues of Rs 72.9 crore (+4.6% QoQ & +24.4% YoY). Jeevansaathi (3% of mix) reported revenues of Rs 17.9 crore (-1.1% QoQ & -26% YoY) while billings for the business came at Rs 17.1 crore (+1.2% QoQ & -30.2% YoY). Margins for Info Edge improved by 445 bps QoQ to 39.1% due to 220 bps margin expansion in Naukri business while EBITDA losses for other business have come down. The company reported net loss of Rs 84 crore for the quarter due to Rs 276 crore writes down in 4B Network (it is a platform enabling real estate developers and brokers to communicate with each other) due to uncertainty of funding envirornment of 4B Network., adjusted to the same, it reported PAT of Rs 191.7 crore, up 14% QoQ. 

Views: Naukri business generally have a strong Q4 in terms of billings due to budget closing related spurt, so if turned out as per trend, we expect Naukri business to close FY23 with 30%+ billings growth. However, since this business largely depends on IT hiring which has seen moderation in last couple of quarters due to gradual decline of attrition, we expect FY24 billing growth in Naukri to normalize to 15-20% which was during normal attrition in IT industry. The company indicated that government’s focus on infrastructure yspending may see some non-IT jobs coming back and subsequently which mat push Naukri billings in upwards of 20%+. In 99 acres, the home prices are becoming unaffordable to most home buyers due to increase in prices as well as continued rise in interest rates and hence growth in this business is expected to moderate unless some equilibrium is reached in pricing. Jeevansaathi business’s turaround hinges on some paid products launched in this quarter which also indicate that the company is likely to arrest billing fall going forward. 

Impact: Neutral