Why This Analyst Sees Naukri Parent Info Edge Going Up 30% Despite Poor Week

HDFC Securities in their research note said that Info Edge's standalone loss of ₹84.3 crore was in large part due to the ₹276 crore write-off related to its investment in the real estate company 4B Networks.

The Info Edge Analyst: Amit Chandra-led analyst team at HDFC Securities maintained the ‘buy' rating for the stock with an upgraded target price of ₹4,600. An upside of around 30% from the stock's last closing price of ₹3517.

The Info Edge Thesis: HDFC Securities noted that the company had a ‘good quarter' as revenue grew by 4.4% sequentially. It highlighted that the company's recruitment segment which accounts for the majority of revenue and billings continues its ‘strong performance' as the EBITDA margin expanded 214bps QoQ to 62.9%.

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In the research note, the analysts said that while hiring in  IT has slowed down, hiring in non-IT sectors like BFSI, infra, travel, etc., is gaining traction. 

The note further added the company's other segments 99acres and Shiksha clocked +25/26% YoY growth and are expected to continue attracting investments. HDFC Securities expects growth to be led by Naukri, 99 acres, and Shiksha going forward.

Talking about Info Edge's matrimonial website Jeevansathi, which reported a 26.3% YoY decline in revenue, the analyst team said that the slowdown was due to a strategy reset. Analysts highlighted that the growth in Naukri, 99 acres, and Shiksha was offset by the slowdown in Jeevansathi. 

The brokerage firm cut its earnings estimates marginally for FY24 and FY25 but increased revenue and EBITDA estimates for the current financial year.

Price Action: Shares of Info Edge traded 0.36% higher at ₹3530 on Wednesday afternoon.

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Posted In: HDFC SecuritiesInfo EdgejobsNaukriQ3FY23Real Estate