Q2-09 Call: Info Edge Plans Senior Mgt Job Portal; IT Contribution To Jobs Down To 25.4%

BSE listed Info Edge India (Naukri.com) is considering a senior management portal, the company disclosed during an analysts call on Friday. Details of the portal are not know - it’s just at a concept stage and they’ve not yet started work on it. Earlier this month, Info Edge had also announced another job portal targeting freshers, called FirstNaukri.

FirstNaukri will be sold to the same customer base through the same sales team for Naukri. Revenue will recruiters and campuses for branding and marketing their students to the corporates; students will not be charged. In the near term, there may be an softening in fresher recruitment, but Naukri is looking at it as a long term play.

On Competition And Market Scenario
According to Info Edge, the situation is dire for competitors - who are being hit harder. “We believe that one of our competitors may actually grow negatively, and marketshare will go up as a natural consequence. Client budgets are slashed in the following pecking order: Placement Consultants –> Print –> TimesJobs –> Monster –> Naukri

However, at 24 percent growth, Info Edge revenues grew less than previously indicated. The company feels that growth may decline even further in Q3 and Q4, though they refused to give a guidance, citing a volatile market scenario.

Pressure on Rates?
Client are asking not asking for lower prices, but they may downgrade to save on costs. The branding solutions will be hit first - downgrading from a panel to a homepage link, or take it for 3 months instead of a year. The company doesn’t see logins moving south, unless the number of recruiters in a company goes down. “The database is a bread and butter product for our clients. They’re probably going to drop competition logins first.” Info Edge is also planning to give bulk discounts, but not lower prices.

Decline In IT Hiring & The Small Accounts Team
The key concern has been the decline in IT hiring: from 29.7% in Q2 last year, to 27.16% last quarter, and 25.16% in Q2 this year. “IT is slowing down fastest, and it is an area of concern, and we expect the slowdown will last through this financial year.”

The company believes they’ll have to launch new products and look at sectors outside IT. Last quarter, the contribution from Infrastructure clients grew at 24%, though banking remained stagnant at 5% of revenues. What’s interesting is that the second rung accounts are growing faster in terms of revenue, and though larger clients have reduced spends, the company claims to have made it up by adding new customers, and more revenue from the smaller accounts team. There’s lots of churn at the bottom of the pyramid in terms of clients. To cut costs, Info Edge itself intends to go slow on hiring - at present, the sales team headcount is around the same compared to Q1. They spent around Rs. 13.7 crores across all businesses on advertising, and are also not cutting marketing expenditure.

Statistics related to specific verticals:
Naukri.com & Quadrangle

– Share of recruitment solutions - 86%
– Growth is slow, but margins have expanded.
– Naukri Revenue from recruiters grew at about 15%, while candidate services grew at 43%
– Main recruitment business grew by 19 percent, of this 15 percent growth was in databases and corporate business.
– 9% revenue is from candidate resume services
– Quadrangle grew at about 38%
– Share of IT: 25.4%, from 27.16 last quarter, 29.7% in the same quarter last year.
– Share of Banking: stagnant at 5% of revenues, same as last year
– Job posts on Naukri: 87,000 (steady above 80,000)
– Number of recruiters: 18600, up from 15400
– Top 10 percent of clients - upwards of 62 percent
– EBITDA margins in recruitment were up to 43% percfrom 41% a year ago
– Total resume database is at 15 million, adding 16500 resumes per day
– Resume updates: 37,000 per day
– Client base: 18600, up from 15400 last year.

Other verticals and Investments:

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iProperty Group Enters India By Acquiring RealAcres.com; To Invest Almost $500,000 In Working Capital

The IPGA Group (iProperty), a company listed on the Australian Stock Exchange (ASX), has entered the Indian market by acquiring Horizon Infoventures, which owns the Indian property portal RealAcres. The acquisition has been made through its wholly owned subsidiary iProperty Group Asia Pte Ltd. iProperty will introduce print, exhibition and online luxury products to the Indian market. They had acquired an events company in March this year (see below for acquisitions).

The terms of the deal: iProperty will invest A$ 0.53 Million (around $470,000) in 4 tranches for 43 percent shares, and swap shares for 17 percent. They will have the option to acquire the remaining 40 percent based on future earnings. The management of RealAcres have a lock-in for a minimum of 3 years.

The deal appears similar to iProperty’s July 2008 acquisition of VRHouse.com.tw in Taiwan. RealAcres claims that it has around 211,000 property listings. The company is based in Mumbai, and focuses primarily on the Western India market. Do note that often real estate agents are offered free listings to get them to sign up for property sites, so the number of listings may not be an indication of paid listings, hence revenue.

Significant players in the online property space in India include MagicBricks (Times Business), 99Acres (Info Edge), Indiaproperty (Consim) and Makaan.com. HT Media and Manorama Online are also planning real estate portals.

RealAcres is just one of the acquisitions that the iProperty group has made since listing on the ASX. More on the iProperty Group and its acquisitions: (more…)