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  • 29 May 2023
  • ICICI Securities

INFO EDGE NON IT TO DRIVE RECRUITMENT BUSINESS, MARGINS LIKELY TO BE RANGE BOUND

NAUKRI - 1461 Change: -14.50 (-0.98 %)

News: Info Edge’s revenue in Q4 increased 1.6% QoQ to Rs 564 crore. Naukri revenues were up 0.2% QoQ, 27.1% YoY to Rs 437.6 crore while revenue for 99 acres increased 3.6% QoQ (up 23.3% YoY) to Rs 75.5 crore. Other verticals grew 11.6% QoQ to Rs50.8 crore led by Jeevansaathi & Shiksha. Jeevansaathi reported 5% QoQ revenue growth to Rs18.8 crore. Billing for recruitment business was up 13.7% YoY while that of 99 acres was up 30.8% YoY. Billing for Jeevansaathi was up 19.9% at Rs 21 crore on a favourable base. EBITDA margins were flat QoQ at 39.1% while absolute EBITDA was up 1.6% QoQ due to lower marketing expenses. EBITDA margins for recruitment business were down 120 bps QoQ to 60.3% while EBITDA losses in 99 acres and Jeevansaathi business have narrowed further. InfoEdge reported net profit of Rs178.9 crore (adjusted PAT in Q4 was Rs197.7 crore) vs reported net loss of Rs84.3 crore in Q3 (in Q3, adjusted PAT was Rs 191.7 crore since it took write down of its investment in 4B network). In Q4, the company impaired Rs 12 crore as ICD given to 4B network. The company at the consolidated level for FY23 reported revenue of Rs2,158.6 crore, up 38.2% with EBITDA margin coming at 36.3%, up 590 bps. The company for FY23 reported PAT of Rs411.2 crore. The company declared a final dividend of Rs 9 per share.

Views: Billing in recruitment business was up 29% in FY23 and historical book to bill suggest that mid to high teen growth is likely possible in this business, which will be driven by non IT sectors such as BFSI , Retail, Travel, which are seeing rebound after Covid. Margins in recruitment business are likely to be range bound. 99 acres are likely to continue growth momentum however due to high competitive intensity, losses in this business will come down gradually. Matrimony business will continue with its free chat strategy for a while till they come out with monetisation of the traffic surged on their network.

Impact: Positive