Monday, May 21, 2012


The recruitment scenario through the online mode, has remained reasonably good despite apprehensions of a slowdown in the economy.
Sectors such as IT have not cut down on their projections of intake in manpower. Info Edge offers a good opportunity for investors with a two-year horizon. It offers a play on the increasing popularity of online portals that offer free and paid services for a variety of activities such as job search, marriage and home finding.
Continuous improvements in resume registrations in and ever expanding non-recruitment business through portals such as jeevansathi.comand 99 are key positives for the company.
At Rs 711, the share trades at 24 times its likely per share earnings for FY13. This is lower than the levels it has traded at historically. Besides, its financial growth rate and lack of listed Indian peer, justify its relatively higher valuations compared to the broader markets.
In FY12, Info Edge's revenues increased by 29.3 per cent over the previous fiscal to Rs 416.5 crore, while net profits improved by 46 per cent to Rs 122.6 crore.
That it has managed these figures in a slowing economy suggests that the company's business-mix helps it stay resilient.


Info Edge's recruitment portal has had a good run over the past few years; it did reasonably well even in the slowing economy last year. The total recruitment business accounts for over 80 per cent of the company's revenues.
In FY-12 alone, the number of resumes on the portal rose to 29 million, up 4 million from a year earlier. What is even more desirable is the fact that the number of resumes modified daily has increased from 72,000 to 91,000. This suggests continuous interest from existing pool of customers. Data from agencies such as Comscore, suggests that naukri is ahead of portals such as timesjobs and monsterindia with a traffic share of 60 per cent.
The IT (25 per cent of revenues), infrastructure (21 percent) and BFSI (5 per cent) sectors form the bulk of recruiters on the portal. Large software companies such as TCS and Cognizant have not announced any cut in their intakes for the year, which means that the perceived slowdown may be very company-specific in this sector.
In the infrastructure sector too, large companies such as L&T and BHEL are still in the hiring mode. The segment also witnesses high attrition, which is a good thing for job portals. Banks, especially public sector ones, are likely to continue hiring, given their talent crunch and exit or retirement in middle- and senior managements.
Notably, advertising for vacancies is rapidly vanishing from the print space in favour of online recruitment, with even public sector companies calling for positions though online ads and registrations. In this regard portals such as naukri would be beneficiaries.


Apart from its recruitment business, Info Edge has witnessed increasing contribution from its other key segments such as marriage portal ( and its real-state focused Web site ( From accounting for next to nothing a few years back, these segments now contribute to 20 per cent of revenues and have been growing at a faster clip than the overall company rate. has seen continuous increase in the number of profiles created. Marriage being a non-cyclical event is less susceptible to macro-economic shocks. In fact, the average amount realised per customer has risen 14.6 per cent in 2011-12 to Rs 3120.
In too, the number of paid transactions has increased rapidly. The company has recently launched, a Web site that caters exclusively to school-going children. It offers study material, NCERT solutions, and interactive learning solutions. While the business is at a nascent stage, it holds value given, Info Edge's ability to monetise its Web offerings.
The marriage and real-estate portal are loss-making, face heavy competition and are not the top players in those segments, unlike the recruitment portal. Any increase in advertising spends for greater brand visibility or cutting of prices to take on competition can hurt margins.

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