Naukri Shares Surge 7% As Brokerages Bullish On Recovering IT Billing Revenue

Brokerages have maintained their bullish calls and increased target price on Info Edge after the company reported in-line results in the March quarter. The brokerages are betting on the company’s recovering IT billing revenue as they see a recovery in IT hiring.

What Happened: For the quarter that ended in March 2024, Info Edge reported an 8.7% YoY rise in revenue to ₹657.42 crore. Its net profit was at ₹87.96 crore against a loss of ₹503.19 crore in the previous year. 

Revenue from recruitment solutions increased 4.54% YoY to ₹480.54 crore while revenue from 99acres rose 22.53% YoY to ₹92.57 crore. Other segments revenue gained 21.16% to ₹84.30 crore.

Profits in the recruitment solution declined to ₹260.3 crore from ₹274.54 crore in the previous year. Losses in 99acres improved to ₹15.18 crore from ₹22.11 crore in the previous year and losses from other segments improved to ₹42.17 crore from ₹74.74 crore in the previous year. 

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Brokerage Views: Kotak Institutional Equities maintained their "Add" call and hiked the target price to ₹6,550. The brokerage assumes lower losses in 99acres due to cash generation in the March quarter and expectation of operating leverage. Kotak also said the company is seeing signs of renewed IT hiring while the resilient non-IT business is offsetting the impact of declines in the IT segment. 99acres is also benefiting from industry growth and is getting enquiries from brokers and channel partners. 

HDFC Securities also reiterated their "buy" call and raised the target price to ₹7,000 as they see recruitment billing grow at around 15% in FY25 which is the pre-COVID average. HDFC also said the recruitment segment will continue to recover due to early signs of recovery in the IT segment along with 99acres and Jeevansathi will move towards breakeven. 

Nuvama Institutional Equities also maintained a "buy" call and increased the target price to ₹7,050 as they see billing growth accelerate due to high utilisation from IT companies and a lower base. 

Price Action: Shares of Info Edge shot up 7.81% to ₹6,325 in the early morning session on Friday. 

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Posted In: EarningsEquitiesNewsPrice TargetReiterationMarketsAnalyst RatingsMoversInfo Edge