Buy Info Edge Ltd For Target Rs.6,250 - Yes Securities
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Our view
Overall, both revenue and EBITDA above estimates. Strong billings momentum should help to sustain growth momentum. Positive operating leverage would drive improvement in EBITDA margin. Best placed to benefit from ongoing digitalization of Indian economy. Sustained high growth in Zomato and other key portfolio companies would continue to support overall value creation. We maintain BUY rating on the stock with target price of Rs 6,250. On standalone basis, it trades at PER of 132x on FY23E earnings.
Result Highlights
* Reported revenue of Rs 3, 197 mn( up 10.2% QoQ, above estimate) The growth was led by strong performance in the recruitment vertical which grew 12% sequentially on back of robust hiring activity in the IT sector.
* Real estate segment , 99acress, saw decline in revenue by 1.8% sequentially due to impact from 2nd covid wave
* Jeevansathi and other businesses were least impacted from the 2nd covid wave and continued their sequential growth momentum as they grew 16.6% QoQ.
* EBITDA margin recovered to its normalised level as it increased by 1290 bps QoQ to 31.2%, led by higher revenue and reduction in Advertisement and other expense by 20.8% QoQ in the quarter. Reduction in marketing cost is due to lockdowns in Q1FY22 and should increase in Q2FY22.
* Losses ( P/L before Tax) in 99acres has narrowed to Rs 29.3 mn from Rs 187.4 mn in Q4FY21 and is well placed to breakeven by end of FY22.
* Billings remained strong as it grew by 66% YoY to Rs 3, 124 mn( down 24% QoQ, due to second covid wave).
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