Readers may remember that Info Edge (Naukri) had mentioned in the press a few weeks ago that revenues will not increase as per expectations – and in a way, offered a revised guidance of 20-25 percent. The second quarter results (Q2-09) are in, and not surprisingly, within the revised guidance. Revenues for Q2 have increased to Rs. 72.31 crores ($14,53 million) – a growth of by 24 percent year on year. Of this amount, Rs. 65.41 crores was the Sales Income.
Info Edge has reported a net profit of Rs. 15.67 crores, which is marginally up year-on-year from Rs. 15.14 crores, and not in line with revenue growth. According to Sanjeev Bikhchandani, MD of Info Edge, this is largely due to the Education business – the portal Shiksha.com – which has taken up significant investment. This is reflected in a significant increase in employee costs as well, which have increased year-on-year to Rs. 25.41 crores, from 17.46 crores in Q2 last year, and Rs. 24.34 crores last quarter. According to Bikhchandani:
“We invested Rs. 8.6 crores at the EBITDA level in our new businesses (Jeevansathi, 99acres, Shiksha, Brijj and Allcheckdeals) in July-Sept 2008. This number was at Rs. 2.9 crores in the same period the last year. This represents an increase of Rs. 5.7 crores in investments in new businesses. If we had maintained investments in new businesses at the same level as last year then operating EBITDA in July–Sept this year would have been Rs. 21.4 crores as compared to Rs. 16.4 crores the previous year – a growth of 30%.”
The company spent Rs. 13.67 crores on advertising and promotion this quarter, up from Rs. 12.14 crores last quarter. In all, for the half year, Info Edge has spent Rs. 25.81 crores on advertising and promotions. During the second half of the year, last year, the company spent significantly more than the first: Given the current market situations, let’s see if that’s the case.
Ambarish Raghuvanshi, CFO of Info Edge has said that there has been a downturn in hiring levels, and the operating environment is “difficult”, adding that 99acres.com has grown appreciably – a revenue growth of 98.9 percent.
Info Edge has, so far, spent Rs. 6.98 crores in Acquisitions and Strategic alliances. This is up from Rs. 5.023 crores from the last financial year. Remember that the company had raised Rs. 30 crores from its IPO for acquisitions. So far, they’ve invested in Study Places Inc, Applect Learning Systems and eTechAces. Our coverage of the eTechAces investment here and here.
Jeevansathi has recorded a revenue growth of 40.3 percent. Percentages don’t matter unless we have a base figure for the revenues, so readers should take that into account. Info Edge has also reported an increase in other income by 18.95 percent – up at Rs. 6.89 crores, up from Rs. 5.79 crores.
Q2-09 Details: Financials
(Updates: added details from financials, inputs from Info Edge MD, corrected revised guidance)
Disclosure: I own an inconsequential number of shares of Info Edge