Info Edge (India), which owns and operates classifieds sites like Naukri.com, 99Acres.com, Shiksha.com and Jeevansathi.com will invest Rs. 5 Crores in a second round of funding in Applect, which runs the e-learning site MeritNation, targeting students giving school exams in India. Info Edge had picked up 40% stake in MeritNation for Rs. 6.5 Crores. While they haven’t disclosed how much their stake they’ll own in Applect after this round of funding, Info Edge now classifies Applect as a subsidiary company, and MeritNation’s website has a banner stating that it is a “Naukri.com group venture”.
Another investment, eTechAces, is now classified by Info Edge as an ‘Associate Company’. eTechAces runs the site PolicyBazaar. In 2008, Info Edge had picked up 49% in eTechAces for Rs. 20 crores. During 2010-11, Info Edge intends to invest around Rs. 12-14 crores in Applect and EtechAces, compared to Rs. 8-9 crores in the 2009-10 fiscal.
Their third investment hasn’t come off well, though the company was acquired by Educomp. Info Edge has said that “one time charges in the P&L pertain to the loss on account of sale of investment in Studyplaces.com”
The company, however, reported positive results for the quarter ended March 31st 2010, indicated in particular by a year-on-year increase in its deferred sales revenues, up to Rs 53.1 crores as on March 31st, 2010, compared to Rs 49.4 crores at the end of the last fiscal. Our report on their financial results here.
Segment-wise notes from Info Edge’s earnings conference call:
Financial Performance: Naukri, Naukrigulf, Quadrangle, and jobseeker services accounted for about 84% of Info Edge’s operating top line in Q4 versus 86% in Q4 last year. Recruitment top line grew 10% in Q4-10 over Q4-09, declined by 7.7% for the year. Naukri.com topline grew 5% in Q4 over last year but for the year declined 12%. The Naukri Candidate Services business grew 22% in Q4 and 17.5% for the year as a whole. Quadrangle (recruitment consultancy) grew 90% in Q4 and 13.5% for the year.
The EBITDA margin in recruitment was 43.5% versus 47.8% in Q4 last year, and 41% for the year versus 43.6% last year. In Naukri the EBITDA margin was at 42% in Q4 down from 49.3% in Q4 last year, and 41% for the year, down from 46.8% last year.
Resumes: The total number of resumes in Naukri was 20.7 million, up from 19.7 million. During Q4 11,300 resumes were added daily, and 68,000 a day were modified. 20,100 recruiter’s paid Info Edge in Q4, up significantly form 17,900 in Q4 last year.
Customers: For the full year, number of customers was up to 35,500 from 34,000 last year. The share of IT in Q4 remained at 26%, the same as Q4 the previous year. The share of recruitment consultants declined marginally in Q4 to 24.7% versus 25.5% last year, but remained the same for the full year at 24.5%. The share of infrastructure in Q4 was 21.9% versus 21.8% in Q4 last year, remaining constant at 21% for the full year.
Non Recruitment Verticals
Info Edge reduced the cash burn substantially in non-recruitment verticals during the year, losing Rs 13.7 Crores at the EBITDA level in these verticals, compared to Rs. 27 Crores last year. These losses are primarily on account of 99Acres (Real Estate portal) and Shiksha (Education portal), since JeevanSathi.com (Matrimonial) almost broke even this quarter. Note that this doesn’t include the loss that All Check Deals (their real estate consultancy) made at Rs. 2.4 Crores, since that is now a subsidiary. Other businesses primarily Jeevansathi, 99Acres, and Shiksha accounted for 16% of the operating top line in Q4 as opposed to 14% last year.
Net sales in all non-recruitment verticals were 30% at Rs. 10 Crores for Q4, year on year, and up 10% at Rs. 36.8 Crores for the full year. The EBITDA losses in the other verticals in Q4 reduced by 58% in year-on-year to about Rs. 2.54 Crores. The EBITDA loss for the other verticals in the year reduced by 50% year-on-year to about Rs. 13.7 Crores.
Jeevansathi.com, Matrimonial: Reported an EBITDA profit of Rs. 14 lakhs for Q4, and an EBITDA loss of Rs. 12 lakhs for the full year. This is marginal, the company says, claiming it has broken even for the year as targeted. Net sales for Jeevansathi grey 12% year-on-year in Q4, and 17% for the full year. Info Edge has decided to invest more in online brand building and in off line center’s in FY11, and this may lead to losses in the medium term, while trying to gain marketshare. The number of profiles ever added increased to 3.7 million as on 31st March 2010. The company claims that other matrimonial competitors are challenged for cash.
99Acres: EBITDA loss for 99Acres was Rs 3.8 Crores for the year. The company says it significantly cut its losses in Q4, and losses might reduce if the real estate market continues to improve: projects are being launched in Delhi and Mumbai; markets in the South are also believed to be recovering. For Q4, topline grew 39% year on year and 22% sequentially, helped partly by improvements in market conditions in Delhi and Mumbai; however, for the full year the 99Acres top line declined by about 5%.
Info Edge claims to be number one in Real Estate, with 40-41% marketshare, and competitors in the mid-30% range, according to Comscore. Note that MediaNama does not agree with this claim. Share of website traffic does not correspond to marketshare (revenue). We also do not believe that Comscore is an accurate indicator of traffic on a website in India, and their survey methodology has not been explicitly specified. Therefore, we would advise our readers to be skeptical about InfoEdge’s claims of marketshare on the basis of Comscore traffic data.
Shiksha & FirstNaukri: “saw good traction in the Shiksha business”. Apparently, customers are renewing contracts and new customers signing up every quarter. The company says they got significant revenue in Q4, and expects this business to grow. Shiksha, Firstnaukri and ACD revenue (part of the revenue of All Check Deals was booked in Info Edge for businesses done earlier when it was a division) earned a top line of about 3.7 Crores and lost 9.8 Crores at the EBITDA level during the year. Revenues from FirstNaukri were marginal, and this site will take a couple of years to reach substantial size and scale. In the “newer verticals”, Info Edge lost about Rs 2.4 Crores compared to 5.8 Crores in the same quarter last year.
All Check Deals: did about 540 deals in Q4 alone. It has a top line revenue of about 4 Crores last year and incurred an EBITDA loss of about 2.5 Crores.
Info Edge says it isn’t seeing much aggression from competition yet, but as the market revives, competition might increase. When asked about LinkedIn on the call, Info Edge MD Sanjeev Bikhchandani said that they’re keeping their eye on LinkedIn, “and it is a matter of some concern but it has not made an impact yet in India”. While LinkedIn has profiles, the intent is unclear, about whether people are looking for a job, and “that tends to impact the recruiter productivity should they use LinkedIn.” Secondly, “India is a country where there is lot of mass hiring and LinkedIn is more of a sniper kind of product for head hunting and therefore we believe LinkedIn will get some traction but we do not believe it will eat into our revenue.”