Info Edge (India) Ltd - Research Report

Private Client Research






Info Edge (India) Ltd


September 13, 2019

Sensex: 37384.99

CNX Nifty: 11075.90


BSE: 532777

Reco Price
Rs. 1904
Price Target (1 Year)
Rs. 2300


September 13, 2019



CNX Nifty








Stock Data

CMP (Rs)
Face value (Rs)
52 Week Range (Rs)
2443.90 - 1310.65
Market cap (Rs Crores)
Price To Book Value (x)
P/E Ratio (x)

One Year indexed Stock Performance

Info Edge (India) Ltd Sensex
Info Edge (India) Ltd
Return (%)


(in %)

+91 22 6639 3000


Info Edge (India) Ltd. is one of India's premier internet-based businesses. Over a period of more than two decades, it has steadily developed a portfolio of brands across different domains that primarily provide online classified services. The company operates online recruitment business through its flagship brand –Naukri ( The online recruitment portfolio is supported by the offline executive search business ‘Quadrangle’ and its associated portal The company operates an online real estate classified business through its portal, online matrimonial classified business through its portal and online educational classified business through its portal Info Edge (India) Ltd. has a network of 75 offices located in 48 cities throughout India. It has also made forays abroad into the Gulf market with the website and currently has offices in Dubai, Bahrain, Riyadh and Abu Dhabi.In the last decade, Info Edge has also expanded by investing in businesses that have been conceptualized and initially developed by separate entrepreneurially oriented management teams. Each of these businesses are managed externally with inputs from Info Edge. Essentially these are part of an investment portfolio of the company. Some of these investee companies include (online restaurant classifieds and food delivery business) and (online insurance).

Businesses This is the company's flagship brand and India's largest online job website. Its business model depends on job listings and employer branding or visibility advertisements, on the one hand, and résumé database access on the other. Additional features of the website include: job seeker services such as candidate services which are free for job seekers, value-added features such as resume writing, highlighting, etc., for job seekers; and tools to search the database of resumes and job application screening programs for employers and recruitment consultants. Google Ad sense and mobile revenues contribute to the revenue as well. One of India's first online platforms to cater to the real estate market, has a pan-India listing of properties for sale, purchase and rent, spanning more than 25 cities. Catering primarily to real estate developers, builders and brokers, uses property listings, builders' and brokers' branding and visibility through microsites, home page links and banners to bring together and connect builders, brokers, dealers and interested buyers/sellers. The key for the business is to stay a step ahead of intense competition in the market from national and local players as well as wider vertical product-selling sites. was acquired by Info Edge in September 2004. Demographic and social factors have played a determining role in the growth of the online matrimonial space in India. In the widely diversified social landscape of India, this has translated into a highly fragmented market. The sizeable opportunity in this space is still restricted largely to arranged marriages with parental consent. Given the challenges, has successfully managed to establish a leadership position among select communities in north and west India. While focusing on gaining market share, there is emphasis on maximizing the flow of paid customers to its social network., an education portal, is a one-stop-solution making course and college selection easy for students looking to pursue undergraduate (UG) and postgraduate (PG) courses in India and abroad. has been a pioneer in this segment since the past 2 years and is expected to record revenues exceeding market expectations in the forthcoming quarter. In this quarter itself, it managed to breakeven for the first time, which is an indication of growth prospects going forward.

Zomato Media Pvt Ltd: Info Edge owns 26.3% stake in Zomato Media Pvt ltd and its revenues are generated from advertisements of restaurants and lead sales. Currently, it has a wide coverage across many cities in India and in 22 countries.

Applect Learning Systems Pvt Ltd: Applect launched a site called, which delivers kindergarten to Class 12 (K-12) study material online for students who wish to do self-study after returning from school. The site is managed by an experienced team that specializes in content development and assessment modules in the education space, and has a strong commitment to delivery.

The company has also invested in,, and Its recent focus has been to develop new and updated apps for mobile phones for its classified online businesses to help customers stay on track with their search and discovery processes. The backend APIs and services infrastructure have been re-architected and main components simplified to support speed to market in launching new features for diverse devices and platforms.

Company is a long term play on the internet space in India with a potential to capture large chunk of increasing online adoption

Foray into new ventures: The company has made incremental investments in areas like technology, product design, data science and has also started building a healthy pipeline of innovation, new products and features keeping in mind the long-term emergence of opportunities in recruitment and other verticals.  The company has invested through its wholly-owned subsidiary in Bizcrum lnfotech Private Ltd (ShoeKonnect). ShoeKonnect is a B2B marketplace that enables footwear brands manufacturers, wholesalers and retailers to connect, communicate and transact with each other for conducting and expanding their business. It also acquired 100% stake of High Orbit Career Pvt Ltd ( in all cash deal.

Product Innovation: The company uses Artificial Intelligence (AI) / Machine Learning (ML) and has always emphasized on smart and simple technology, and more so in present times. Data is the corner stone for any AI/ ML business transformation and this is where Info Edge has an edge over its competitors. Accordingly, AI/ ML and semantic searches enjoy significant investments of time and money from the company. These initiatives are transforming client interactions to more technology driven client support by helping them in improving the understanding of various elements of the environment.

Improving hiring trends in Technology to provide growth boost: The company’s growth was impacted during the last two years due to subdued hiring in the IT sector ( IT segment contributes 30% of business revenue). With the Jobs peak index now showing a jump in IT hiring, company’s growth rates have started improving. A key focus of its investments is on technology and product talent which is likely to fuel its growth further.

Real estate profitability around the corner: The company’s real estate business has witnessed strong growth for the last six quarters. It attributed high growth to increased consumer activity post-RERA regulations, though there has been sharper increase in broker business, indicating higher secondary unit sales. Demonetization, GST and RERA implementation had an incremental impact on the sector affecting queries / transactions and resulted in builders spending less on advertisements and listings. 99acres however, kept growing during this period, indicating strong movement of traffic to the digital channel.

Investments in Zomato & Policy Bazaar leading the pack: Zomato indicated that the company has grown 3x over the last year on account of delivery and membership businesses. The business grew multi-fold with market expansion and some customer acquisition costs. The company has also showcased some improvement in key metrics such as reduction in last mile costs & Policy Bazaar continues to witness strong top-line growth.

Dominant Traffic share among peers: Naukri is a market leader in its segment and has ~ 70% of traffic share on time spent for job seeking. The company has 58000+ unique clients as well as almost 54000 job seekers availed premium services and around 64 million resumes were uploaded.

Extensive Sales Network: Naukri has over 100% of industry profits enabling greater investment in – Product innovation, Engineering, Brand support, Sales network, Servicing back office, Superior talent. The company has a nation-wide physical presence through 75 company-level branch offices spread across 48 cities in India. Through this network, it has almost 3,000 sales, servicing and client facing staff. In the present business environment, this network is playing a very critical role in expanding the company’s services to semi-rural and rural India.



The single most important driver of rapid internet penetration across India is the widespread adoption of mobile internet in India. In fact, 97% of the internet users utilise mobile phone as one of the devices —if not the primary device — to access the net. With this kind of penetration in India, internet is transforming the way consumers and marketers interact with each other in today’s digital world. In particular, the increase in the digital usage in rural India is opening up a new dimension for internet-based businesses in the country. Interestingly, in rural India today, more than two-thirds of active internet users are now accessing the internet daily to meet their entertainment and communication needs.

The growing digital economy coupled with rising per capita income and favourable demographics presents a huge market potential for internet-based technology-led disruptions. High growth potential and the size of the market continue to attract significant interest from global capital providers like Private Equity (PE) and Venture Capital (VC) funds. PE/VC funds have already invested over USD25 billion in the last five years in Indian e-commerce and consumer internet. The confidence of investors has grown as evidenced by the increase in the size of deals in these spaces. India is now considered as a profitable investment destination for e-commerce and consumer internet.

Profit & Loss Statement:- (Standalone)

(Rs Crores)

DESCRIPTION Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20E Mar-21E
Net Sales 611.35 717.61 802.11 915.49 1098.26 1369.61 1732.36
Growth(%) 17.00% 12.00% 14.00% 20.00% 25.00% 26.00%
Power & Fuel Cost 5.82 7.12 7.79 7.80 7.95 7.85 7.85
Employee Cost 246.62 335.44 375.16 393.06 458.64 565.46 730.50
Operating Expenses 7.47 8.50 10.70 11.22 13.78 15.87 17.28
General and Administration Expenses 64.85 73.34 66.32 62.27 73.11 93.49 114.26
Selling and Marketing Expenses 84.16 131.84 88.05 116.37 175.69 199.48 245.30
Miscellaneous Expenses 20.19 36.55 62.30 23.10 22.65 23.41 28.50
Total Expenditure 429.10 592.79 610.32 613.81 751.82 905.56 1143.69
EBITDA 182.24 124.81 191.79 301.68 346.44 464.05 588.67
EBITDA(%) 30.00% 17.00% 24.00% 33.00% 32.00% 34.00% 34.00%
Depreciation 17.32 20.96 24.06 21.55 20.38 23.32 26.50
EBIT 164.92 103.85 167.73 280.13 326.06 440.73 562.17
Other Income 76.40 92.48 101.93 97.09 111.15 113.82 113.82
Interest 3.01 3.34 3.81 4.45 5.18 5.18 5.18
Profit Before Taxation & Exceptional Items 238.31 192.99 265.86 372.77 432.03 549.37 670.81
Exceptional Income / Expenses 29.16 -11.46 -3.98 -91.34 -33.41
Profit Before Tax 267.47 181.54 261.87 281.43 398.62 549.37 670.81
Provision for Tax 73.61 56.42 57.47 99.07 116.92 150.31 185.36
Profit After Tax 193.86 125.12 204.40 182.37 281.70 399.06 485.45
Earnings Per Share 16.13 10.36 16.88 15.00 23.09 32.63 39.69
Source: Stockaxis Research, Company Data


The recruitment and real estate businesses continue to drive growth for the company. We remain buoyant on the company’s diversified presence in the high-growth internet space. We expect the strong growth momentum in Naukri and 99acres to revive with recovery in the Jeevansathi business, following increased advertising and focused efforts of the management on that front. Investee businesses are also posting robust growth, with Zomato’s innovative product offerings further fuelling revenue. We assign 29x P/E to the recruitment business, 9.5x EV/sales to Zomato, 10x EV/sales to other loss-making businesses and 6x EV/sales to other investee companies to arrive at target price of Rs 2,300. We strongly believe company to post strong growth in billing, indicating potential to step up revenue growth from diversified businesses