Stock of the Day: Info Edge Ltd

In the dynamic world of finance, Info Edge India has recently taken center stage, with its stock experiencing a notable surge and impressive Q2 results. Let's dive into the details of this financial story.

Stock Performance:

As of today, November 15, 2023, Info Edge India stock witnessed a robust rise of 4.95%, closing at Rs 4732.3 per share, up from Rs 4509.2. Investors are advised to closely monitor the stock in the upcoming days and weeks to gauge its response to market dynamics.

Here's a quick snapshot of the stock's performance on the last trading day:
Open: ₹4515
Close: ₹4515.5
High: ₹4521.4
Low: ₹4473.2
Market Capitalization: ₹58126.1 crore
52-week High: ₹4984.1
52-week Low: ₹3310

Recent Trading Updates:

15 Nov 2023, 01:43:37 PM IST: Trading at ₹4720.1, up 4.68% from yesterday's ₹4509.2.
15 Nov 2023, 01:28:45 PM IST: Trading at ₹4721.15, up 4.7% from yesterday's ₹4509.2.
15 Nov 2023, 08:29:12 AM IST: Trading at ₹4727.65, up 4.84% from yesterday's ₹4509.2.

Q2 Financial Highlights:

Info Edge India reported robust Q2 results, showcasing a 3.5% YoY rise in revenue to ₹625.8 crore. The company's net profit doubled to ₹205 crore, leading to an interim dividend declaration of ₹10 per share for the financial year 2023-24.

Segment-wise Performance:

Insights of CEO:

Hitesh Oberoi, MD, and CEO of Info Edge India, acknowledged the strong performance in the real estate vertical (99acres.com) and the recruitment business. He highlighted the reduction in burn in certain verticals and the robustness of the Non-IT hiring market.

Info Edge India's impressive stock surge, coupled with robust Q2 results and a dividend declaration, positions the company as a significant player in the dynamic Indian market. Investors and enthusiasts alike will undoubtedly be keeping a close eye on this financial trailblazer.

Financial Highlights:

In the second quarter:
    1. Revenues grew by 11.5% compared to the same period last year.
    2. Billings increased by 4.8% year-on-year (YoY).
    3. Operating profit rose by 26.8% YoY, with a 450 basis points increase in operating profit margin.
    4. Profit before tax saw a significant growth of 24.7% YoY.
    5. Cash from operations increased by 13.9% YoY.
    6. Deferred sales revenue at the end of Q2 grew by 11.3% YoY.

Listings:

The company is listed on:
    1. National Stock Exchange of India Limited with the Scrip Code NAUKRI.
    2. BSE Limited with the Scrip Code 532777.

Recruitment Solutions Business:

    1. Non-IT hiring showed moderate growth, while tech hiring experienced some softness.
    2. Revenue for Naukri India increased by 7.7% YoY, with steady billings.
    3. Growth observed in non-IT segments, especially in small towns.
    4. Continued investments in platforms like Job Hai, Ambition box, and areas like Data Science and Machine             Learning in Naukri.

Real Estate Segment:

    1. The real estate segment maintained growth momentum with increased property prices and robust end-user demand.
    2. Billings in the real estate segment grew by 22% YoY, and revenue grew by 25.2% YoY.
    3. Continued efforts to improve data quality and reduce spam on the 99Acres platform.

Shiksha Education Business:

Billings grew by 3.7% YoY, and revenue grew by 15.9% YoY.

Jeevansathi Matrimony Business:

Billings increased by 16.7% YoY, and revenue grew by 8.6% YoY.

Performance Expectations:

    1. Anticipating improved performance in the second half of the fiscal year.
    2. Uncertainty regarding the recovery of the IT sector and its impact on the recruitment business.
    3. Focus on attrition backfilling and potential hiring increase if IT sector demand improves.
    4. No significant recovery observed in the IT sector yet.
    5. October performance influenced by the timing of Diwali.

Naukri India Billing:

Naukri India billing for Q2 was Rs. 370.6 crores, including IIM Jobs.

Impact on Recruitment Business:

    1. Recruitment firms significantly impacted, with business activity down 60-70%.
    2. Decreased efficiency rates in IT companies leading to downgrades and reduced platform usage.
    3. Managing costs with a focus on investing in machine learning and AI capabilities.

Company Initiatives:

    1. Ongoing developments and integrations on the Naukri platform, including partnerships with Coding Ninjas, Ambition Box, and JobHai.
    2. The payout ratio determined based on cash requirements, deferred revenue, and future expenses.
    3. The dividend policy is 15-40% of adjusted PAT, with the possibility of special dividends in certain situations.

Future Plans:

    1. Aiming for 20%+ revenue growth in Naukri and 99Acres.
    2. No current plans to monetize stakes in Zomato and Policy Bazaar, as growth potential still exists.