InfoEdges Q4FY21 numbers were below our estimates. However, the company has seen improving billing growth both on a YoY and QoQ basis. Billing increased 25.1% YoY, 39.8% QoQ to | 415.3 crore, mainly led by 26% YoY growth in recruitment and 41.5% YoY growth in 99 acres billing. As compared to Q4FY19 (a pre-pandemic quarter), overall billing was up 15.0%. Overall revenues on a QoQ basis increased 6.5% QoQ. EBITDA margins declined from 29.9% in Q4FY20 to 18.3% (below our estimate of 29.6%)...
Although Info Edge reported a dip in revenues YoY, its performance improved QoQ. Revenues increased 6.3% QoQ to | 272.3 crore while EBITDA margin improved 491 bps QoQ to 25.0%, indicating a recovery in the economy. However, we believe the performance will improve in coming quarters led by opening up of the economy. In addition, billing has also...
Info Edge (INFOE) reported billings decline in 1Q due to COVID-19, which was reflected in 19% YoY revenue de-growth in 2Q (due to the subscriptionbased model of the business). Continued MoM improvement (after the trough of May20) in billings is in line with our assumption of a gradual increase in revenues going forward. Margins in 2Q were dragged down by aggressive marketing spends in Jeevansathi/99acres. Management indicates the current run-rate of advertisement spends would continue as the company aims to increase its market share in the matrimony portal. Nevertheless, we still estimate a...
InfoEdge reported a poor set of Q2FY21 numbers that were below our estimates. The significant dip in Recruitment business (down 19.3% YoY) and 99 Acres (down 36.3% YoY) led to 19.1% YoY decline in revenues to | 256.1 crore (below our estimate of | 280.2 crore). EBITDA margins declined from 31.4% in Q2FY20 to 20.1% in Q2FY21. However, we believe the performance will improve in coming quarters led by opening of the economy. In addition, billing has also improved 32% QoQ indicating...
Outlook and Valuation: Currently the stock is trading at very stretched valuations and way beyond fundamentals as the markets are pricing in qualitative factors like solid fundamentals, strong competitive moat, value unlock potential in some of the investments, which will take some time to reflect in the numbers.
Near term headwinds, long term revenue trend robust Covid-19 impacted revenue growth in Naukri. Revenues from the recruitment business declined 8.8% YoY vs. sustained double digit growth. Billings also dipped 44.3% YoY in Q1FY21 led by lockdown. However, the company is witnessing improving traffic share across segments (including recruitment). We expect revenues to return to pre-Covid levels in Q3FY21E. In addition, opening of economy and recovery in IT sector will further boost revenues at recruitment business. In 99acres, continued pressure in real...
Valuation Upgrade to Buy with a PT of Rs. 3,650: We have revised our estimates upward for FY2021E/FY2022E, factoring in strong beat in operating margin, continued growth momentum in Jeevansathi business, and gradual recovery in billings in IT and telecom segments. We continue to believe that leadership position in its core businesses along with improving valuation in certain investee companies (Zomato and PolicyBazaar) bodes well for the company. Further, we expect revenue and margin to improve sharply in FY2022E because of the companys cost-control measures and resumption of economic activity. We prefer...
8 September 2020 The complete impact of the COVID-19-led lockdown was seen in the 1QFY21 financial performance, with billings decline of 44% YoY. The drag in revenues (-10.4% YoY) was curtailed due to the subscription- based model of the business. INFOE has shown a high resilience in the margins (+420bp YoY) on account of superior cost optimization. For the first time, the company was able to show gains from investee companies, primarily led by positive contribution margins from Zomato. Traffic on INFOEs operating portals has inched up to pre-COVID levels. Given the companys market positioning, multi-dimensional growth may be expected across its core businesses in the medium-to-long term. We expect long-term growth trends to play out at its operating entities, whose margins continue to inch up on high operating leverage. Furthermore, led by an inclination for profitability in investee companies, we expect consolidated losses to be curtailed over time.
Outlook and Valuation: While we believe that these are a positive development for INFOE, we continue tobelieve that the core/standalone business of the company is expected to suffer in thenear term as the growth prospects of the company are closely linked to GDP growth ofthe company.
Outlook and Valuation: We value INFOE at Rs. 2092 based on SOTP. While the standalone business is valued at a 3-yr historical average FY22E PE of 64x, Policybazaar and Zomato are valued based on their last round of funding.
Covid 19 impacted revenue growth in Naukri. Revenues from the Naukri business slowed down to 10.3% vs. 18.0% in the previous six quarters. Billings also dipped 6.0% YoY in Q4FY20 led by weakness across markets. Further, a slowdown in hiring in IT segment and pressure on hiring in other sectors is also expected to impact revenues. In Q1FY21E, the company may see a dip of 50% in billings. We expect the company to reach Q4FY20 revenues in Q4FY21E. Hence, we revise our revenue estimates for FY21E (down 14.6% YoY) and expect a recovery in FY22E (up 35% YoY). In...
23 June 2020 Impact of the COVID-19 led lockdown dragged 4QFY20 financial performance for Info Edge (INFOE). While the last quarter of the financial year is seasonally strong, INFOE saw billings decline for Naukri and 99acres. The INFOE board has approved QIP of INR18.75b, which would be utilized for additional investments in the standalone entity, and strategic acquisition to compliment one or more of the standalone businesses. Given the companys market positioning, multi-dimensional growth can be expected across its core businesses in the medium to long term. Further, led by INFOEs inclination toward gaining profitability in investee companies, we expect consol. losses to be contained over a time period. Our SOTP valuation indicates target price of INR2,550. Maintain Standalone (S/A) revenue was up 1% QoQ/10.3% YoY to INR3.2b (in-line). Recruitment revenues grew 11.2% YoY (v/s 13.1% YoY in 3QFY20).
Recruitment revenue grew 11.2% YoY (v/s 18.4% YoY in 4QFY19), 99acres.com grew 3.7% YoY (v/s 45.8% in 4QFY19) and Jeevansathi grew 25.4% YoY (v/s 6.5% in The companys B2B businesses (Naukri.com and 99acres.com) saw a major part of the COVID-19 impact. According to the companys estimate, COVID-19 related impact led to a Unlike the above, Jeevansathi saw only a nominal impact with collections Given that Naukri.com and 99acres.com together contribute 90% of INFOEs standalone business, we expect 1QFY21 to be a complete washout. According to our estimate, the company has clocked an XIRR of >40% since the time it We foresee a halt in near-term momentum, led by expectation of billing decline in the recruitment and real estate segments for 1HFY21. However, given the market positioning of its entities, multi-dimensional growth could be expected from the company in the medium-to-long term, backed by recruitment, real estate, Zomato (its biggest investee company) and Policybazaar.
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