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  • 12 Nov 2022
  • ICICIdirect Research

INFO EDGE BUSINESS CONTINUES TO BE STRONG EBITDA LOSSES IN 99 ACRES SEEM ARRESTED

NAUKRI - 8668 Change: -5.55 (-0.06 %)

News:

Revenue increased by 4.8% QoQ to Rs 531.8 crore aided by recruitment revenues which were up by 8% QoQ (up 63% YoY) to Rs 418.1 crore while revenue for 99 acres increased 5.1% QoQ (up 44.4% YoY) to Rs 69.7 crore. Other verticals also reported decline of 18.8% QoQ to Rs 44 crore led by Jeevansathi.  Jeevansathi reported 5% QoQ revenue decline to Rs 21.8 crore ( due to tactical move of making available some the paid features i.e chat, free of cost, for limited time period). Billing for recruitment business was up 41% on YoY basis while that of 99 acres was up 11.2% on YoY basis on favourable base. Billing for Jeevansathi was down 30.5% on YoY basis

·         EBITDA margins were up 246 bps to 34.6% due to 5.1% QoQ decline in marketing expenses ( we believe it largely pertains to Jeevansathi business due to tactical move we mentioned above ) and flat QoQ employee expenses . EBITDA margins for recruitment business were up 120bps QoQ to 59.4% while EBITDA losses in 99 acres witnessed some recovery

·         InfoEdge reported PAT of Rs 168.1 crore, which was up 13.3% QoQ

·         Board has declared an interim dividend of Rs 10 per share, record date is 21st Nov 2022 and payment date would be 7th Dec 2022

View:

 The company’s performance was strong on all parameters except Jeevansathi business.  The billing in recruitment as well as in 99 acres continue to be robust on YoY basis which gives visibility for future revenues. EBITDA margins in the recruitment business continue to be strong while EBITDA Losses in 99 acres seems to have arrested as losses were lower this quarter but more clarity will emerge on competitive scenario from management commentary in the conference call.  Jeevansathi business might also have an impact of seasonality in Q2 as indicated by the competition apart from strategy change. We would come out with an update post earnings call.

Impact:

Positive