Stock in Action - Info Edge 02 Aug 2024

Why Info Edge Share is in News?

Shares of Info Edge (India) Ltd. have garnered significant attention recently, hitting fresh 52-week high of ₹ 7,285.75 on August 2, 2024. Despite weak market environment, Info Edge's stock surged 5% on BSE during intraday trade, highlighting company's positive outlook & investor confidence. This robust performance comes amidst broader market downturn, with Nifty 50 & Sensex both experiencing declines.

What is Info Edge Ltd Recent Deal? & How Fruitful it is?

Info Edge Ltd. recently made headlines by investing ₹ 30 crore ($4 million) in Gnani.ai, voice-first generative AI platform, through its venture capital arm, Info Edge Ventures. This Series-A funding round is aimed at expanding Gnani.ai's sales growth & business footprint across geographies. investment in Gnani.ai, which offers advanced AI solutions such as Omni channel conversational automation, voice biometrics, & Omni channel analytics, is expected to enhance Info Edge’s strategic position in AI-driven technology sector.

Founded in 2016 by Ganesh Gopalan & Ananth Nagaraj, Gnani.ai boasts patented tech stack for Text to Speech (TTS), Speech to Text (STT), Natural Language Processing (NLP), & augmented intelligence that supports 14 Indian languages. company's AI platform has significantly impacted financial institutions, helping them collect over $2 billion from customers in last six months. With over 100 enterprise customers in India & US, this investment aligns with Info Edge's growth strategy & diversification into cutting-edge technologies.

Fundamental Analysis of Info Edge Stock

Info Edge Business Model & Growth Drivers
Info Edge (India) Ltd. is prominent player in online services sector, primarily operating through its well-known portals such as Naukri.com, Jeevansathi.com, 99acres.com, Shiksha.com, & IIMJobs.com. company's core businesses span online job recruitment, real estate, matrimonial services, & educational portals, providing diversified revenue stream.

Info Edge Recent Performance & Financial Metrics
As of June 30, 2024, Info Edge reported standalone billings growth of 10.78% year-on-year, amounting to ₹ 579.40 crore in Q1FY25. recruitment solutions segment grew by 8.52% to ₹ 431.40 crore, while real estate segment (99 acres) increased by 10.35% to ₹ 81 crore. Other segments saw a significant jump of 28.6%, reaching ₹ 67 crore.

Market Position & Investor Sentiment

Stock's recent performance underscores strong investor sentiment, with a 59% increase in share price over the past eight months. stock's P/E ratio indicates high growth expectations, & its beta value of 0.56 reflects relatively low volatility compared to broader market. As of June 30, 2024, promoters held a 37.88% stake in the company, with FIIs & DIIs owning 32.13% & 10.98%, respectively.

Key Metrics

- P/E Ratio: Indicates growth expectations & investor willingness to pay higher prices for potential future growth.

- Price-to-Book Value: Reflects the inherent value of the company & investor readiness to pay for stock.

- Beta Value: 0.56, indicating lower volatility relative to the market.

Infoedge Conference Call Highlights - May 2024

Info Edge Financial Performance

1. Standalone billings grew by 10% YOY in Q4 FY24, with revenue increasing by 8% YOY.

2. Operating profits at the standalone level grew by 9% YOY, with cash from operations increasing by 13% YOY.

3. Full-year FY24 standalone billings & revenue grew by 5% & 10% YOY respectively, with operating profits at the standalone level growing by 18% YOY.

4. Cash from operations for the full year was ₹ 1,135 crores, with YOY growth of 9%.

5. Cash losses in non-recruitment businesses decreased significantly by 75% from FY23 to FY24.

6. Cash balance of Info Edge including subsidiaries stood at ₹ 4,191 crores as of March 2024.

7. Q4 FY24 recruitment billings grew by 7% to ₹ 625 crores, with revenue increasing by 3% to ₹ 452 crores.

8. The operating profit margin for the recruitment business was 57% in Q4, with cash generation from operations at ₹ 458 crores, and YOY growth of 2%.

9. Full-year FY24 recruitment billings grew by 1% to ₹ 1,883 crores, with revenue growing by 7% to ₹ 1,805 crores.

10. Operating profit margin for the full year was 58%, with cash from operations in FY24 amounting to ₹ 1,208 crores.

11. Q4 FY24 real estate billings grew by 26% to ₹ 131 crores, with revenue increasing by 23% to ₹ 93 crores.

12. Operating losses reduced by 31% to ₹ 15 crores, with cash flow from operations being positive at ₹ 30 crores, YOY growth of 121%.

13. Full-year FY24 real estate billings grew by 24% to ₹ 385 crores, with revenue growing by 23% to ₹ 351 crores.

14. Operating losses reduced by 42% to ₹ 69 crores, with cash loss for full year improving by 82% to ₹ 13 crores.

15. Q4 FY24 matrimony billings grew by 26% to ₹ 26 crores, with revenue increasing by 29% to ₹ 24 crores.

16. Operating losses reduced by 59% to ₹ 9 crores, with cash loss also improving by 54% to ₹ 9 crores.

17. Full-year FY24 matrimony billings grew by 17% to ₹ 85 crores, with revenue growing by 10% to ₹ 85 crores.

18. Operating losses reduced by 44% to ₹ 59 crores, with cash losses improving by 56% to ₹ 55 crores.

19. Q4 FY24 billings for education vertical grew by 9% to ₹ 45 crores, with revenue increasing by 22% to ₹ 39 crores.

20. Operating profit for education vertical grew to ₹ 6 crores in Q4, with cash from operations at ₹ 15 crores, flat YOY.

21. Full-year FY24 billings for education vertical grew by 15% to ₹ 143 crores, with revenue growing by 19% to ₹ 139 crores.

22.    Operating profit for the education vertical was ₹ 3 crores, with cash from operations at ₹ 24 crores, YOY growth of 15%.

Infoedge May-24 Conference Call Key Highlights

1. Efforts of opening new branches in tier 2 & tier 3 cities to penetrate non-IT & SMB segments further.

2. Healthy renewal rates & broad-based billing growth were observed in Q4 across various sectors.

3. Significant billing growth in IIM Jobs & Naukri Fast Forward, with Naukri Gulf reporting YOY growth of 26% during the quarter.

4. Overall client base increased to 132,000 customers in FY24 from 127,000 customers in FY23.

5. New businesses like Job Hai & Ambition Box started monetizing in Q4.

6. Continued investments in AI, data science, machine learning, & product improvements.

7. Introduction of Naukri 360 for comprehensive career-related initiatives.

8. Momentum continued in Q4 for both primary & secondary parts of real estate business, with strong demand & premiumization of supply observed in some markets.

9. Traffic growth & app DAU base increased significantly in Q4 for real estate segment.

10. The success of the freemium model is reflected in consistent revenue growth & organic traffic increase for the matrimony business.

Info Edge Dividend & Future Plans

1. Cash balance of ₹ 4,191 crores at end of March 2024, with proposed final dividend of ₹ 12 per share & interim dividend of ₹ 10 per share for FY24.

2. Total dividend for FY24 increased by 16% YOY.

3. Continued investments in strategic startups & digital assets, with focus on maintaining right cash balance for strategic decisions & opportunities.

4. Confidence in the growth potential of investee companies like PB Fintech & Zomato, with openness to inorganic activities & investments in startups.

5. Emphasis on maintaining a strong cash position for flexibility in decision-making & strategic moves.

Infoedge Future Strategy 

1. Plan to slowly increase prices in the resale side of business as more value is delivered to customers.
2. Continuously focus on creating value for customers to justify price increases.
3. Management is optimistic about the future potential to increase prices in the resale market, focusing on delivering value to customers to stay ahead of competitors & adapt to changing market dynamics.

Strategic Investments & Future Outlook

Info Edge's strategic investments, particularly in high-growth sectors such as AI with Gnani.ai, are expected to bolster its long-term growth prospects. positive outlook for the company's recruitment business, driven by sustained growth in non-IT sectors, further strengthens its market position.

Conclusion

Info Edge (India) Ltd. is demonstrating robust performance & strategic growth, evidenced by its recent stock market surge & strategic investment in Gnani.ai. company's diversified portfolio, strong financial performance, & strategic investments position it well for sustained growth. Investors are optimistic about Info Edge's future prospects, as reflected in its stock price reaching new heights despite broader market challenges. company's focus on innovative technology & expansion into AI-driven solutions is expected to drive further growth & enhance shareholder value.