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InfoEdge Q1-FY12 Call: Vertical Specific Results; 99Acres Profit; Mobile Apps; Investments

Info Edge started the financial year 2011-2012 with healthy deferred sales revenues of Rs 95 crores, up by 55% YoY and 6% QoQ, probably the highest it has ever been. The company reported a Profit After Tax of Rs 25.6 crore during the quarter in contrast with 17.3 crores last year, and Operating PAT of Rs 19 crore up by 52.7%. The company intends to increase their spending on  TV advertising, especially in Naukri and 99acres. Their was a 18-20% salary hike in this quarter.

99Acres Will Scale Slowly

99Acres focuses primarily on attracting dealers as customers, and, in response to a question from MediaNama, Oberoi said that “In the long run for this business to do well, we need to add more and more customers, we need to add more and more dealers. We need to increase the client base dramatically. Right now, we are I think at about 6000 or so customers, this number has to be tens of thousands for this business to become big. And the problem we have out there, however, is that a lot of the dealers are not very tech savvy. Many of them do not have computers, they don’t have access to the internet so fair amount of time is spent on educating them on how to use the Internet, on helping them buy an internet connection. And therefore while this business will scale in the long run, it will scale slowly.”

In terms of geographies, Info Edge has offices for 99Acres in more than 10 cities. “A lot of our business comes from Delhi, Mumbai and Bangalore, followed by places like Chennai, Hyderabad and Pune. We will continue to focus on these markets. We are not looking to expand beyond the top 10 or 12 cities at the moment.”

Still Not Keen On Mobile

The company is exploring the mobile space – launching its applications – but appears to be reticent, saying that its primary focus is the consumer Internet space in India. In response to a question about whether the company was looking at mobile Internet startups for investment, Info Edge Vice Chairman Sanjeev Bikhchandani said that “We are not looking at any external investment in a mobile startup. Our charter is to look at the consumer Internet in India and that is what we are sticking to. So any mobile work that we do is largely inside the company. Sure, if somebody has produced something which is relevant for mobile and jobs, right now we may look at it. But because it is jobs and we will not invest in any sort of mobile startup that is not very closely related to one of our current internal businesses.”

The Naukri WAP site, Oberoi said, is getting some traffic and that traffic is increasing month-on-month. “The applications have not been so successful till now but that is because we do not have an android asset yet and android is the largest operating system on the smart phone. We are developing one and that should be out quickly.” Seems he is not aware that there is already an Android application that offers Naukri.com Job listings.

Info Edge is also not considering any mobile operator tie-ups, or looking at mobile so much for monetization, but more for traffic: “Often Naukri is blocked in offices and people are not able to access the site. What we expect to happen is that initially through the mobile phones is that people who do not have access to Naukri because either they don’t have a computer or they do not have access to the net in office, are able to log on more often and that is what we are working on,” Bikhchandani said.

Notes from the conference call:

Investments : InfoEdge made a total of 3  investments in Q1 FY-12:
– Rs 10 crore in eTech Aces.
– Rs 15.7 crore in 99Labels.
– Rs 9 crore in MyDala.

Vertical Specific Results:

Recruitment Solutions(Include Naukri.com, Naukri Gulf, Job Seeker Services, FirstNaukri, Quadrangle) :
– Net Sales Rs 70 crore as compared to Rs 54.80 crore last year.
– Naukri corporate sales top line grew by about 35%
– In Naukri, the EBITDA margin was at an all-time high of 55% up from 45% in Q1 last year. Responding to a question, Info Edge CEO Hitesh Oberoi said that, in case of Naukri.com, the company will be able to maintain margins if it is able to grow its top line by more than 20% year on year
– Operating EBITDA for the quarter is 34.30 crore, an increase of 43.13%
– Quadrangle sales declined by about 12%
– EBITDA margin in recruitments in this year and this quarter were at 49% versus 42% in Q1 of last year
– Resumes: 26 million, up from 22 million last year for the same quarter.
– Average Resumes added daily: 12,000, down from 13,000 last year.
– Average resumes modified daily: 79000, up from 70000 last year same quarter
– Number of unique paying customers: 22900, up from 20900 in Q1 FY 10-11
– Share of Naukri.com revenues: 25% IT/ITES, 5% BFSI, 21% Infrastructure.

Limited Usage Plans for Naukri: impacts less than 10% to the companys customers, and mostly impact heavy users. Oberoi said that “There has been some resistance for sure because in many cases the bill size has gone
up phenomenally. However, we are working with these customers to figure things out and we did not see any impact of this in Q4. Going forward because some customers have come back and complained about the quota being more stringent than required, we are working on ways to make it easier for them.”

Other Verticals ( Jeevansathi, 99Acres, AllcheckDeals) :
– Net Sale: 16.7 crores form 11.10 crores in Q1 FY 10-11
– Operating EBITDA loss, went up to 2.70 crore from 2.50 crore in last year same quarter.

JeevanSaathi :
– Jeevansathi net sales grew by 21%
– Number of profiles ever loaded: 4.5 million, up from 4.3 million in the last financial year.
– Average number of profiles acquired daily: 2122,up from 1646 last year same quarter.
– Number of unique paid customers: 23304, up from 22674 in Q1 FY11
– Average amount realized in Rupees: Rs 2491 in contrast with last years figures of Rs 2252.

– 99 Acres encountered a small profit for this quarter, although the real estate business took a hit due to the high interest rates and the court’s order on the projects in Delhi-NCR.
– Top line grew by 52% YoY in Q1.
– Number of listings (approx): 211,000 as compared to 127,000 in last year for the same quarter.
– Number of Paid transactions: 6900 compared to 5500 last quarter.
– The company is planning to invest in TV advertisements for 99Acres

– Shiksha net sales grew 127%
In response to questions from MediaNama, the company declined to reveal specific figures for Shikhsha, citing competitive reasons. They did say, however, that Shiksha has over 1000 paying customers. “We have been constantly adding customers, we just released our ad campaign on television and we got a very good response. We are getting repeat business,” Oberoi said.

AllCheckDeals: The company did not reveal any specific results but stated that the business has been impacted in Noida following the High Court’s edict .

– PolicyBazaar will not be treated as a subsidiary for now on as Intel has become a co-investor.
– Committed an additional investment of Rs 10 Crores in eTechAces (MeritNation)
– Rs 15.7 Crores were invest in 99Labels during the quarter
– Rs 9 crores were invested in MyDala during the quarter

Bikhchandani said that as they get involved in the second rounds in these companies – the ones they believe in – there would be larger bets placed.

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