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Result Highlights

* Reported revenue of Rs 1,757mn (up 3.6% QoQ, down 25.2% YoY) slightly below expectation.  

* EBITDA was also below expectation as it declined by 9.5% QoQ (down 53.6% YoY). EBITDA margin declined by 283 bps QoQ (down 1199 bps YoY) to 19.7%.  

* EBITDA margin decline in the quarter was led by 5.3% QoQ increase in employee cost and 19% QoQ increase in other operating expenses. Steep YoY decline in margin was due to negative operating leverage on account of 25% YoY decline in revenue  

* Adjusted PAT declined by 33% QoQ (down 56% YoY) to Rs 336 mn, also impacted due to decline in other income by 52% QoQ.

* Cash and equivalent increased to 15.7 bn from Rs 15.1 bn in Q3FY21.

* Overall listing growth moderated to 0.8% QoQ (compared to +0.7% QoQ in Q3FY21 and +1.4% QoQ in Q2FY21) to 30.4 mn listings in the quarter.

* Total traffic (unique visitors) declined by 2.6% QoQ to 129.1 mn, led by rising competition and the adverse impact of lockdown restrictions.

* Paid campaigns grew by moderate 0.8% QoQ to 457.4k

Our view:

Overall, performance was weak as SMEs has been severally impacted due to lockdown restrictions and addition in paid subscriptions is expected to be modest going ahead. Improvement in margin is challenging due to higher contribution from T2‐T3 cities where realizations are lower. A lot depends on how the B2B segment shapes up. Trades at PE ratio of 14.5x on FY23 earnings.  Maintain REDUCE

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