Q3FY23 Review: Info Edge (India): Billings growth moderates, margins optimized

13 Feb 2023 , 01:25 PM

Info Edge (INFOE) reported revenue growth of 33% YoY (+4.4% QoQ) in Q3FY23, aided by strong 40% YoY growth in Naukri, primarily due to strong hiring in non-IT sectors. Billings – a leading indicator of revenues – moderated to 15% YoY, albeit on a tough base with Naukri billings growing 18% YoY. Mgmt suggested that moderation in IT growth was a result of delayed decision making by IT players. 99acres continued its momentum, growing revenues by 24% YoY as Real Estate market remained strong. 

INFOE delivered 3QFY23 margins of 39.1%. Ad expenses declined by 7.4% YoY, as company cut marketing spend in Jeevansaathi and experimented in 99Acres. Marketing spends and investments in user experience will rise in 99Acres, they stated. INFOE reported an exceptional loss of Rs2.76bn, owing to impairment of 4B Networks due to inability to raise funds in a tough funding environment.

Recruitment segment saw billings growth moderate to 18% YoY, though on a tough base, as IT sector witnessed slowdown, owing to the current macro and stabilizing attrition; however, non-IT hiring remained strong. Revenue grew by 40% YoY. 99Acres witnessed 16% YoY growth, as strength in the Real Estate market was offset by continued competitive intensity. Jeevansathi further declined (revenues -26% YoY) as it drove user traffic through concessional offerings. Shiksha continued to surprise (+26% YoY).

Ebitda margin rose to 39.1% (+445bps QoQ), as marketing spends were optimised across segments. INFOE recorded an impairment charge of Rs2.76bn on 4B Networks (fully written down) citing difficult markets. 

Analysts at IIFL Capital Services maintain Buy with target price of Rs 5200.