logo-info-edge-indiaIn line During the conference call held last evening discussing Info Edge‘s results (details) for the quarter ending September 30th 2009, COO Hitesh Oberoi appeared optimistic: “Sales were up by 4%, the slide seems to be getting contained, and we’re seeing demand moving up across sectors and geographies. Most companies are now doing replacement hiring, if not hiring for growth. The other good thing is that competition in all our segments continues to be impacted more than us. This is an opportunity for us to invest and build and gain marketshare in the long run.”

However, at 83% of topline (compared to 86% in Q2 last year), Recruitment remained Info Edge’s key vertical, even as Jeevansathi (Matrimonial) reported an EBITDA profit. For other verticals, Net Sales were flat year-on-year, at Rs. 9.2 crores. According to Oberoi, the company was able to reduce EBITDA losses in newer businesses by 61% to about Rs. 3.3 crores during the quarter, compared to 8.6 crores in the same quarter last year, and Rs. 4.4 crores in Q1. Brijj, Shiksha and All Check Deals earned a topline of Rs. 1 crore and lost around Rs. 2.6 crores at the EBITDA level in Q2. “We’ve controlled costs, and can’t cut costs beyond this. Now a lot depends on revenue growth,” Oberoi added.

Both 99Acres (Real Estate) and Jeevansathi (Matrimonials) witnessed key changes, that impacted performance:

99 Acres: Junks Unlimited Listings Plan

99Acres had an unexpectedly poor quarter, reporting a decline in both number of listings (from 271000 in Q1 to 199000) and number of paid transactions (from 4900 in Q1 to 4600).

2009-09-sep09-info-edge-99acres-q2-snapshot

Oberoi told MediaNama that the company had decided to discontinue with their unlimited listings plan, in order to reduce the number or junk and false listings. Thus net sales for 99Acres declined by about 33%, though the company was able to reduce EBITDA losses by 71%. “Despite the number of listings having moved down substantially, the number of inquiries is still the same,” Oberoi said, adding that “It validates the point that some of these listings were not required.”

Oberoi said that the environment is weak, but there is a slight recovery in markets like Delhi and Mumbai, though the market in the South (India) has not yet recovered. “The major competitors continues to be MagicBricks. The other two players – Makaan and IndiaProperty are losing out because they’re not investing enough. Our marketshare continues to be 35-40% mark in this segment,” Oberoi said.

Operating EBITDA margin was up 3.7% at 27.48%. The operating PAT margin is up 0.8% year on year at 16.65%.

Jeevansathi: Hikes Prices, Price War

Oberoi said that Jeevansathi, which turned EBITDA positive during the quarter, has reported an increase in realizations by nearly 10% quarter on quarter. This is because the company took a price hike in Jeevansathi, in the average range of 10%, albeit different for different price points. Oberoi said that the company used to price products lower than competition. “Competition has been discounting heavily, and there is some sort of a price war going on.”

On being asked about the active users on Jeevansathi by MediaNama (the ‘total number of profiles ever added’ figure is irrelevant for a matrimonial business), Oberoi was hesitant: “We normally don’t give out these numbers, but we get around 3.5-4 lakh people logging in every month onto the site. In a quarter, we have slightly less than a million who are active.”

Net sales for Jeevansathi grew 16% year on year, and the company reported an EBITDA of around Rs. 2 million. “We have a total of 14 offline centres, and have not added any centres in the last 3-4 months, as we try to get the model right. Hopefully we should be able to break even at the end of this financial year. Competition continues to be challenged for cash and capital, and this is helping us improve our position in the marketplace,” Oberoi said.

Download: Info Edge Key Performance Indicators

Recruitment: Naukri, Naukri Gulf, Quadrangle & Recruitment Services

Recruitment business reported revenues of Rs. 460 million, with an EBITDA margin was 38%. The margin declined primarily due to increased advertising spends (details). In Naukri, the EBITDA margin was at 36.9%, down from 45% a year ago, and 42% last quarter. The company expects the margin for Naukri to move above the 40% mark only if sales look up. Oberoi said that the pricing is stable, and the company saw an uptake across sectors in the last quarter: IT-ITES verticals have picked up, though it is still challenged alongwith financial services and real estate.

In Q2, 18100 recruiters paid up versus 17700 in q1 and 18600 in Q2 last year. The share of IT declined marginally to 24.5% in Q2 versus 25.4% in Q2 last year. The share of recruitment consultants was 25.4% versus 24.3% in Q2 last year, while the share of infrastructure was 22% versus 22.6%.

No Plans To Bid For Government Job Portal

Responding to MediaNama’s question on plans to bid for the government job portal, or whether it views it as competition in the future, Oberoi said that the company doesn’t “see the employment exchanges competing with us, because we address a very different segment of the market, which is a white collar market. Employment exchanges are more relevant to blue collar workers.” He added that a few companies have approached them – especially IT Services companies – to see if they can bid together for these contracts. “But this is a very different business: we’re a consumer Internet company, and not a software services company. We’d be happy to consult for these projects, but we don’t see ourselves bidding for our assignments.”

Brijj

Has around 2.4 million profiles, but getting people to network on the site is a challenge. “We’re not expecting any revenues from Brijj in the short run.”

Shiksha

Saw some traction. There’s a product revamp planned in the next three months. Many players doing different things, and business models are different for different companies. Some are looking at a lead based model, some are looking at branding. “We are doing both: it’s early to say how it will evolve.” On the revenue split between International and India, Oberoi said that it’s early to say how the market will evolve, but the company is focused mostly on the domestic market.

All Check Deals

Had a good quarter: closed around 350 deals in Q2. Business has slowed due to weak sentiment in real estate. Lower price projects have come up. We’ve spun off ACD as a separate subsidiary.

FirstNaukri

FirstNaukri was launched commercially, and we have products for recruiters and campuses.

Headcount

Info Edge is not reducing headcount anymore: “we are replacing people who are leaving now. Headcount will increase slowly, but a salary increase will come into effect from 1st October. Average salary hike given is in the 5% range.”

Investee Companies

Meritnation has launched the ICSE product, following CBSE. The feedback is enouraging and revenue is going up, but it’s still too small to talk about.

In PolicyBazaar (eTechAces), we’re entering the time when insurance activity picks up, but the numbers are small but not material.

In case of StudyPlaces, we own about 13% of the stock. Can’t comment on how their business is doing: they’ve had a tough few months.

On Investments or acquisitions: “Nothing cooking at this point in time.”