Info Edge (India) LtdQ2 FY23Retailing

Info Edge (India) Ltd

Q2 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Long-term outlook remains bullish on the Indian market, expecting growth to normalize after short-term slowdowns lasting 2-4 quarters.
→Recruitment segment growth expected to stabilize at 15-20% per annum aligned with 5-6% GDP growth, post-COVID base effects.
→Non-IT hiring is broadening and growing, expected to contribute more to revenue, potentially shifting mix slightly from IT to Non-IT over time.
→Physical sales offices expanding to 60-80 cities to cater to Non-IT demand, enhancing distribution and client reach.
→Marketing spends on new businesses like JobHai and Ambition Box continue despite short-term lack of revenue, highlighting long-term investment strategy.
→Real estate business (99 Acres) showing strong top-line growth backed by market buoyancy and increased listings, with cautious marketing spend increases planned.
→Client renewals currently pressured due to hiring slowdowns and bench size issues but expected to rebound with economic recovery.

Margin guidance

Category 3

→Info Edge expects long-term growth in their core recruitment business to stabilize at 15-20% annually once COVID and post-COVID base effects normalize, assuming the Indian economy grows at 5-6% (Page 13).
→The recruitment segment faces near-term challenges in IT hiring with slowdown, but sustained growth in non-IT sectors is anticipated (Page 4, 6, 13).
→99 Acres shows significant billing growth (20% YoY) and revenue growth (24.6% YoY), with improving operational metrics and reduced losses, indicating improved profitability prospects (Page 4, 7).
→Investments in new businesses like JobHai and Ambition Box will continue, with current losses expected as these are long-term plays (Page 11, 15).
→Operating profit margins improved significantly in Q1 FY24 to 35.8% (including acquired businesses), driven by controlled costs and marketing spend optimization (Page 3, 7).
→Overall, management remains bullish on the Indian market and expects business normalization and earnings growth after this cyclical slowdown (Page 15).

Get access to all 5 sections — revenue, margin, fundraise, orderbook, and capex — for Info Edge (India) Ltd and 1,400+ other companies.

Fundraise plans

→No explicit mention of any current or future new fundraising through debt or equity in the provided transcript.
→Discussion on Info Edge Ventures getting a new investor for its funds, but it relates to existing venture funds (Fund 1 mostly done, Fund 2 and Capital 2 scouting new companies), with no specific mention of fresh fundraising through public equity or debt issuance.
→Cash balances are strong (Rs 3562 Cr as of June 30, 2023), and the company seems focused on cautious investments and long-term strategies.
→No indication of plans to raise fresh capital via debt or equity in the near term as per the Q&A excerpts.

Order book

The transcript provided does not explicitly mention current or expected orderbook or pending orders for Info Edge (India) Ltd. However, here are related insights that can be linked: - Naukri's IT hiring demand has slowed down, with the Jobspeak index down 3% YoY in Q1 FY24 and a further decline in July. - Non-IT hiring remains relatively buoyant, which may influence business order flow positively. - Real estate segment (99 Acres) shows strong traction with billing growth of 20% YoY in Q1 FY24 and positive demand environment indicating healthy order inflows. - Client renewals are taking longer due to slower market conditions, indicating potentially delayed booking of orders. - Companies are currently cutting back on hiring and are cautious in contract renewals, affecting near-term demand. No specific figures or formal orderbook data are disclosed in the transcript.

Capex plans

Yes

→Non-IT business is seeing growth with plans to expand physical offices to more cities, potentially 60-80 cities over the next 1-2 years to cater to broader hiring demand.
→New offices start small with 1-2 salespeople and are profitable within months; additional sales hires focused on launching new products like Zwayam and IIMjobs.
→Investment continues in new businesses like JobHai and Ambition Box, with current marketing spend around Rs 20-25 crore per quarter despite no immediate revenue generation.
→Marketing spends are managed carefully, potentially increasing if market conditions remain favorable to support 25%+ growth.
→99 Acres plans to expand offices to smaller towns, seen as strategically important over 3-5 years despite most revenue still from top cities.
→Info Edge Ventures is cautious but finds this a good time for long-term investments with reasonable valuations and smaller round sizes.

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