Info Edge (India) Ltd. share price target

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.

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.

The spread of Covid-19 has led to lockdowns in many countries globally and could have adverse economic implications. In addition, the recent fall in crude prices could also have an adverse impact of fiscal health of oil producing countries. As a result, IT companies, which have considerable exposure to verticals such as oil, energy & utilities; banking & capital markets; manufacturing and travel & transport could see an adverse impact from the ongoing crisis. Companies like Wipro, Infosys in large cap and MindTree, NIIT Tech, Sonata software, Cyient, Accelya Solutions among...

We begin coverage on Info Edge (INFOE) with SELL and a Mar'21 TP of Rs 2,080.

Revenues from recruitment business (Naukri) grew at a slower pace at 13.1% YoY (average 18% in last six quarters) while billings growth slowed down to single digits (8.5% YoY). Billings were impacted by ongoing weakness in non-IT segments (spreading to sectors like FMCG, travel, retail) and markets like Mumbai & Delhi getting impacted more than Q2. Further, slowdown in hiring in IT segments has played in lower growth in billings. The pressure is anticipated to be there in the near term and lead us to slightly tweak our revenue estimates for the segment for FY20E. Hence, we expect...

Growth Likely to Moderate in the Future..Stable Q2 performance:Info Edge (INFOE) reported YoY revenue growth

Info Edge (India) Limited (Info Edge) delivered strong revenue growth of 19.5% y-o-y despite a slowdown in non-IT hiring. Recruitment business growth remained strong at 18.7% y-o-y, though the growth of 99acres was strong at 26.1% y-o-y but moderating from 30%+ growth in last seven consecutive quarters. Jeevansathi reported strong growth of 13% y-o-y owing to aggressive investments in gaining market share and higher conversion of customers. On a comparable basis, EBITDA margins declined 170bps y-o-y to 29.4%, below our estimates, owing to...

Naukri, 99acres continue to be major growth drivers The company's recruitment business (Naukri) grew at a healthy 18.7% YoY while slower growth of 14% YoY in billings can be attributed to broad based weakness in non-IT segments (60% of revenue). The billings could be volatile in the near term driven by weakness in core sectors with additional pressure from financial and travel tourism space on account of slowdown. However, hiring in IT sector and 11% YoY growth in unique customers would drive growth in the segment. Hence, we expect this segment to...

Info Edge (INFOE) reported revenue of Rs. 3128 Mn, up 21 percent YoY. Growth rates are in line with normal run rate of company's growth rate.