(By Preethi J & Nikhil Pahwa)
Infoedge India (Naukri), which owns portals such as Naukri, 99 acres, JeevanSathi, Shiksha, Brijj and career guidance site AskNaukri, has recorded a net profit of Rs. 138.3 million for the quarter ending March 31st 2009, a decrease in net profit by 11.4% over Q4 last fiscal when the company had reported a net profit of Rs. 156 million. Remember that Q4 is usually a key quarter for Info Edge, where they tend to incentivise their sales team significantly. Revenues for the quarter were at Rs. 641.6 million, while net sales were at Rs. 577.01 million are down 11.2% compared to Q408. They reported an earnings per share (EPS) of Rs. 5 for Q4.
The company reported full year total revenues at Rs. 2737.96 million (up 14.2%), on net sales of Rs. 2451.66 million (up 12%). They recorded a profit of Rs. 596.9 million up 7.6% from last year.
CFO Ambarish Raghuvanshi has said that the results reflect the difficult business environment in hiring and real estate to some extent; “The focus is on cost management and on organic growth in the near term.” The company believes that they are well placed in terms of the competition.
Speaking to the Indian Express a couple of days ago, Info Edge MD Sanjeev Bikhchandani had said that the job market appears to be improving, and the worst is over, as far as hiring is concerned. “December was the bottom. So, barring another external shock, it is likely that the worst is over and you are going to see a recovery. It may be a slow recovery or may be a fast recovery. But already January-March has been better than October-December for us.”
Our take: it’s not very encouraging that Q4 was much worse than Q3, but as we had explained last quarter – Naukri signs annual contracts and defers payments throughout the year. This appears to be an indication that Q4 wasn’t very good for renewals. If contract renewals don’t improve, or if new contracts aren’t signed this quarter, then the growth in revenues could take longer as well.
Details: Release | Financials
Verticals like 99acres.com and Jeevansathi.com incurred a loss of Rs.58.02 million in Q4 of FY 2008-09 as compared to Rs.78.72 million for corresponding quarter in FY08, at the EBITDA level. Jeevansathi revenues have grown by 31.49%, while 99 Acres revenues have grown by 53.98% for the year. Firstnaukri.com, a new portal launched by the company in January, is expected to take a year to gain traction
Sales & Advertising/Promotion Expenses
Over the past couple of quarters, Info Edge has suggested that the downturn in the economy results in a decline in competitive activity – thus, it allows them to retain or maintain marketshare despite lower advertising and promotional spends. The decline in the companys promotional spends is evident – at Rs. 84 million, Q409 recorded the least advertising and promotion spends for the company in the last two years.
Coping with Slowdown
The company has initiated cost optimization measures and says that they’ve reduced administration cost by Rs 4 Million. In an investor presentation from January, they had mentioned plans to increase the efficiency of their sales force, who are around 1318 in number, and also suggested cutbacks and gradually decreasing the head count.
Note: Nikhil Pahwa, Editor of MediaNama no longer holds any shares of Info Edge.
— Q3-09: Naukri Reports Profit Of Rs. 172.12M, Revenues At Rs. 701.76M; Net Sales Down 9.95%
— Q309 Call: Why Info Edge Sales Were Down Only 10% In Q3
— #DMR: 71% Of Info Edge’s Current Marketing Spends Are Online