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Info Edge reported broadly inline performance for the quarter. It reported revenue of Rs 6,389 mn( up 5.0% QoQ, up 9.3% YoY). The sequential growth was led by 4.3% QoQ growth in revenue of Recruitment business; 6.2% QoQ growth in revenue of 99acres segment and 9.2% QoQ growth in revenue of Jeevansathi segment. The number of resumes have reached 100mn vs 98 mn in Q4FY24. EBITDA margin declined by 154 bps QoQ to 39.0% on higher marketing cost ( up 23.7% QoQ). Reported billings of Rs 5.8bn( up 10.7% YoY), led by 8.4% YoY growth in Recruitment billings and 10.4% YoY increase in billings for 99acres and 28.6% YoY growth in billings of ( Jeevansathi+Siksha). Reported PAT of Rs 2,323 mn vs Rs 2,109 mn in Q4FY24. It is seeing some green shoots with regard to IT related job postings on its portal. The losses in Jeevansathi and 99acres continue to come down even as billings growth momentum sustained. The new strategy for Jeevansathi is yielding results as traffic and billings continue to grow as it aims to breakeven in FY25. We expect Revenue/EBITDA/PAT to grow at 16.2%/16.7%/16.7% over FY24-FY26E. We have revised our FY25E/FY26E EPS by (0.3%)%/1.5%. We maintain ADD Rating on the stock with revised target price of Rs 7,797/share (vs Rs 6,552 earlier) arrived through SOTP method on FY26E Estimates.

Revenue growth was slightly above estimates

Reported revenue growth of 5.0% QoQ,( up 9.3% YoY). The sequential growth was led by 4.3% QoQ growth in revenue of Recruitment solutions, 6.2% QoQ growth in revenue of 99acres segment and 9.2% QoQ growth in revenue of Jeevansathi segment. The number of resumes and unique clients for the naukri business continue to grow at steady pace. There are some green shoots in IT related hiring; while non IT related hiring remains strong. Both 99acres and Jeevansathi are seeing strong growth momentum led by rising customer engagements levels. Shiksha has also seen robust traction recently. We expect revenue to grow at 16.2% over FY24-26E, well supported by broadbased growth across segments.

EBITDA margin was down sequentially

EBITDA margin was down by 154 bps QoQ to 39.0%. Operating losses in other segments continue to come down, thus supporting operating margin. Also, marketing cost in Jeevansathi has come down. It would continue to invest in growth areas including building capabilities in Machine Learning and AI; and we expect EBITDA margin to be broadly steady around 39-40% in near term.

Maintain ADD Rating with revised target price of Rs 7,797/share

We expect business growth to broadbased across all 4 key segments. IT related hiring should pick up as utilization levels have increased sharply across all IT companies. Both, 99acres and Jeevansathi are expected to breakeven over next 1 to 2 years and that will support operating margin. The new strategy for Jeevansathi is yielding results as traffic and billings continue to grow as it aims to breakeven in FY25. We expect Revenue/EBITDA/PAT to grow at 16.2%/16.7%/16.7% over FY24-FY26E. We have revised our FY25E/FY26E EPS by (0.3%)%/1.5%. We maintain ADD Rating on the stock with revised target price of Rs 7797/share (vs Rs 6,552 earlier) arrived through SOTP method on FY26E Estimates.

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