During the company’s conference call announcing its Q1-FY13 results, Info Edge CEO Hitesh Oberoi informed that the company’s net sales were at Rs 106 crore for the quarter ended 3oth June 2012, a 32% increase from Rs 87 crore in the same quarter last year, Sequentially however, the net sales were flat.

For the quarter, the operating EBITDA (Earnings before interest, taxes, depreciation and amortization) was up 17% YoY at Rs 37 crore, while the operating EBITDA margin was at 34.8% as against 36.5% in Q1-FY12. The operating Profit After Tax (PAT) was up 19.7% YoY at Rs 33 crore while the operating PAT margin was at 21.7% as against 22.2% in Q1-FY12. The deferred sales revenue decreased to Rs 111 crore as on June 30 2012, from Rs 119 crore in March 30, 2012 and Oberoi said that they are observing a substantially lower growth and a more subdued environment, similar to last quarter, leading to deceleration in the recruitment market. He also added that the group will remain cautious for the year 2012-13.

Expenses: Oberoi said that the ad expenses were up 35% YoY due to higher investments in JeevanSathi and 99acres. Manpower expenses increased by 22% YoY due to an increased headcount and salary increases. Network expenses also increased by 20% due to increased investment in servers and rupee depreciation since the servers are based in the United States. Other expenses increased by 27% due to an increased headcount. Oberoi noted that the headcount is up by around 20% YoY although sequentially, the growth is not significantly up.

Oberoi said that they have taken a new building in Greater Noida- Noida Expressway region on rent, which can house up to 1200 people, for which interiors are currently being done. The company is investing around Rs 40 crores on interiors of this building. Oberoi indicated that the company’s rental expenses will also be higher this year since they may have to pay double rent for a short period.

On the investment front, Oberoi said that the group has neither committed nor invested any additional capital during this quarter. However, its investing company will need further funding. It is currently evaluating newer investment opportunities.

On profitability of Investee companies: Sanjeev Bikhchandani, Vice Chairman and Founder, Info Edge India, said that none of their investee companies are making profits at present and it would take at least an year or two for any of its investee companies to make profit on a sustainable basis. However he noted that Zomato, Policybazaar, MeritNation, and MyDala were currently doing well and the group was planning to tweak the business model of 99labels. He also noted that any new Internet company will usually take 5-6 years to break even, provided the business scales up well and not all of its investments are going to do well.

On threat from Social Hiring and Facebook job boards like Branchout: Oberoi said that Naukri sees no short term threat from social hiring platforms and that the slowdown the company is currently seeing, is due to markets slowing down as a whole. He added that Naukri does have intentions to leverage social media platforms for hiring in the future, but they do not see that adding to its revenues in the short term period. Oberoi also added that LinkedIn is not impacting their businesses in India yet although they do view the company as a competitor in the long run.

Future Plans for Naukri: The group is currently working on improving their product offerings and has increased the number of people in products, engineering and design. The company is also working on developing new recruitment tools as well as improving their matching capabilities and search feature. Oberoi added that Naukri is also planning to integrate Facebook to the portal and is currently conducting various experiments around it.

Headcount: The group has added 400 employees during the quarter. Oberoi noted that the headcount has grown substantially in 99acres and in Naukri, followed by a small number in Jeevansathi and Shiksha.

Vertical Specific Results:

Recruitment Solutions(Include Naukri.com, Naukri Gulf, Job Seeker Services, FirstNaukri, Quadrangle) :
– Net Sales Up 19% to Rs 83 crores
– Naukri corporate sales grew by about 20%
– Quadrangle sales declined by 33% YoY
– EBITDA margins in recruitment were at 50%, stable on a YoY basis
– Naukri EBITDA margin was at 55%, stable on a YoY basis
– During the quarter, Naukri added 13,000 fresh CVs every day and total database has more than 30 million CVs.
– Naukri CV modifications were an average 115,000 per day.
– Job Speak Index closed at 1210 in June
– During the quarter, the company has served 25,000 unique clients, a 9% YoY increase from 22,900 clients in the same quarter last year.
– Naukri has around 60% – 62% traffic share i.e. unique visitors multiplied by average page views per visitor, according to comScore Metrics.
– Ambarish Raghuvanshi Group President-Finance and Chief Financial Officer of Info Edge India, noted that deceleration in Naukri is higher than the group’s other businesses, although he didn’t reveal any breakup between all its businesses.
– IT firms accounts for 25% of its client base and search firms account for 28-29% of its business.
– Oberoi noted that Naukri Premium is still in beta but the response from their customers has been encouraging till now.

Other Verticals (Jeevansathi, 99Acres, AllcheckDeals) :
JeevanSaathi:
– Net sales grew 15% YoY
– During the quarter, the losses increased to 2.5 crores due to higher investment in brand building.
– The company is the number 3 player and pricing is 20-30% lower than competition.
– Oberoi said that the group is increasing their spendings on television and on brand building as opposed to profile acquisition, which is the reason for the lower profile acquisition numbers during the quarter.
– He added that the company’s net sales is actually higher than 15%, however the revenue is deferred due to a change in the company’s product lineup and people are buying longer term subscriptions.

99Acres:
– Net Sales grew by 47% YoY to Rs 10.5 Crores.
– At EBITDA level, the business made slight loss of Rs 9 million due to higher investments.
– Total listings increased to 4.2 lakh from 2.5 lakh last year while the paid listings increased to 3.4 lakh from 2.1 lakh.
– Transactions are down 20-30% YoY in most of its markets. No new launches in markets like Chennai, Noida and Mumbai during the quarter.
– The company will continue to invest in this business by expanding its sales reach, improving its product and service offerings and building a brand as it sees this market to be sizable in the long run.
– 99Acres’s traffic share is mid-30s range, according to comScore Metrics.
– Employee Headcount has gone up on a year-on-year basis, although there is no specific figures for it.
– Oberoi noted that there are not enough new projects being launched in the country, due to which the revenue growth from new projects is not as high when compared to secondary sales and rentals.

Shiksha:
– Net sales grew by about 57%.
– The group is committed to invest in this vertical.

RelatedNaukri Reports Rs 31.78 Crore Profit, Rs 105.98 Cr Sales For Q1-FY13