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 (www.naukri.com). The online recruitment portfolio is supported by the offline executive search business ‘Quadrangle’ and its associated portal quadranglesearch.com. The company operates an online real estate classified business through its portal 99acres.com, online matrimonial classified business through its portal jeevansathi.com and online educational classified business through its portal shiksha.com. 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 www.naukrigulf.com 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 zomato.com (online restaurant classifieds and food delivery business) and policybazaar.com (online insurance).
Naukri.com: 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.
99Acres.com: One of India's first online platforms to cater to the real estate market, 99acres.com has a pan-India listing of properties for sale, purchase and rent, spanning more than 25 cities. It caters primarily to real estate developers, builders and brokers and uses property listings, builders' and brokers' branding and visibility through micro sites, 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.
Jeevansathi.com: Jeevansathi.com 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, jeevansathi.com 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.
Shiksha.com: Shiksha.com, 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. Shiksha.com 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.
Zomato Media Pvt Ltd: Info Edge owns 22.7% 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.
Policy Bazaar: Policy Bazaar is India’s online price comparison site for insurance, it significantly adds value to individuals and financial institutions for policy related decision-making. It is a leader in its category as it captures an approx 90% share of insurance comparison & 50% share of online Insurance transactions. This business provides lot of scalability as currently less than 4% of the Indian population is insured. It owns 15% stake in Policy bazaar.
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 (Shoe Konnect). Shoe Konnect 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 (iimjobs.com) in all cash deal.
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 Information Technology sector (IT segment contributes approx 40% 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 three 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 ~ 90% of traffic share on time spent for job seeking. The company has 59000+ unique clients as well as almost 46000 job seekers availed premium services and around 6.7 crore resumes were uploaded as on December 2019.
Price: INFO EDGE is trading with bullish bias on daily charts as well on weekly chart making repeated cycles of higher tops and higher bottoms formation. The stock is preferred pick in Technology -Investment sector and is currently trading above its 200EMA moving averages on weekly chart and support zone of Rs.1750 - Rs.1850 on daily charts.
Indicator: The stock is trading above 200EMA moving average on weekly chart. The RSI(14) on daily chart it’s been trading in over zone and crossing the 9 period moving averages , looking for northward direction.
Volume: Price and volume analysis plays an important part in determining overall strength or weakness in the stock. Price and volume pattern are moving in the same direction which reflects the true movements in the stock. Info Edge stock has seen the profit booking with thin volume, which still shows the movement of this stock, is still on bull side.
Conclusion: From the risk reward point of view, the stock is looking attractive at current a level, which is trading with bullish bias. Traders may go long on the stock around Rs.1811 levels keeping a stop loss below Rs. 1540 for the targets of Rs. 2270 levels in medium term time frame.