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Demand Momentum to drive Growth

Info Edge (India) Limited is engaged in online classified business. Company operates an online job portal Naukri.com, matrimony website Jeevansathi.com, real estate search portal 99Acres.com and an educational website Shiksha.com.

* Q4FY22 revenue grew 57.4% YoY to Rs. 473cr (+12.2% QoQ). And 40.9% in FY22 to Rs. 1589cr, driven by tailwinds in recruitment and real estate verticals.

* Total Billings for the quarter were up 52.5% YoY at Rs. 649.3cr while that for FY22 were up 58.7% at Rs. 1,866cr.

* Q4FY22 EBITDA grew 191.2% YoY (+49.4% QoQ), as EBITDA margin expanded 3,360bps YoY to 73.2% (+1,822bps QoQ). Reported PAT of Rs. 12,882cr (+808.5% YoY) in FY22

* Company delivered solid results and we expect the demand to increase as tailwinds from Recruitment business to continue and looking at revival of demand in Real estate market, we reiterate our BUY rating on the stock with a revised target price of Rs. 4,865 based on SOTP valuation.

Strong Demand drives Topline growth

Consolidated revenue for the Q4FY22 increased 57.4% YoY and 12.2% QoQ to Rs. 473cr and 40.9% YoY in FY22 to Rs. 1,589cr led by strong demand for recruitment solutions business due to increased gap between demand and supply of skills globally and strong growth in Real estate. Recruitment solutions segment revenue increased 48% YoY in FY22 to Rs. 1,182cr and 75.1% in Q4FY22 to Rs. 366cr (+15.7% QoQ) mainly on account of strong growth in billings. In Q4FY22 billings grew 66.6% YoY to Rs. 513.3cr. Profit margins for Recruitment business increased 976 bps YoY to 57% while it declined sequentially 21bps. 99 acres business in 4QFY22 reported revenue of Rs. 61cr (+22.3% YoY; +4.5% QoQ), and Rs.217cr in FY22(+25% YoY) due to strong revival of demand. For FY22 billings in 99acres grew 25.1% YoY at Rs. 217cr and with 10.6% YoY growth in Q4FY22 it stood at Rs. 79.3cr.

EBITDA almost Tripled

Q4FY22 EBITDA surged 191.2% YoY to Rs. 346cr (49.4% QoQ) as EBITDA margin expanded 3,360bps to 73.2% (+1,822bps QoQ), mainly due to lower operating costs. In FY22 company reported PAT of Rs. 12,882cr (vs. Rs. 1,418cr in FY21) due to one-off marked to market listing gains in Zomato of roughly Rs. 9,500cr. Adj EPS grew by ~62% at Rs. 35.78.

Key concall highlights

* 60% YoY growth in Jobspeak Index in Q2FY22. IT and ITes grew 173% YoY, whereas banking, insurance, retail, and hospitality grew by 40-60% YoY.

* During the quarter NCLT approved the merger with Highorbit Careers (iimjobs).

* Company invested Rs.137.1cr in 4B Networks Pvt ltd, a tech platform to connect agents, brokers, and builders as well as track and aggregate new home site visits and home loans.

Valuation

With outstanding growth in billings and revenues, improved margins and profitability company delivered solid performance. We expect the trend to continue in medium to long term as the gap between supply and demand of skills will continue to benefit the business, on the other hand Real estate market is picking up. Hence, we reiterate our BUY rating on the stock with a revised target price of Rs. 4,865 based on SOTP valuation

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