Info Edge, which owns Naukri.com, Jeevansathi, 99Acres, Shiksha.com, among others, has reported a net profit of Rs 64.23 crore for the quarter ended March 2017 (Q1 FY18). Points to note from Info Edge’s earnings conference call for Q1-FY17. Our coverage of the results here.

Naukri.com impacted by GST

Info Edge’s CEO and MD Hitesh Oberoi said during the earnings call that the Naukri’s growth in Q1 was impacted due to lower hiring trends in the IT sector and GST. He said that the company needs to be watchful of the top line growth in Naukri for the next couple of quarters if the IT slowdown continues and domestic GDP growth does not pick up. “The full impact of GST on businesses will also play out over the next few quarters,” Oberoi added.

Info Edge had indicated in its previous calls that due to the change in sales incentive policy last year, it expects higher billing growth in Q1 (Naukri), and was, therefore, expecting higher than 12% growth that it has reported, “but that did not turn out to be the case”. “There were some clients who seem to have delayed purchases as they were unsure of the impact of GST on their businesses,” the management added.

  • In Q1FY18, Naukri an average of 17,700 fresh CVs every day as compared to 14,600 last year
  • Naukri’s database grew to around 53 million CVs
  • In Q1, Naukri had a total of 47,200 unique customers as compared to 43,800 unique customers in Q1 of last financial year.
  • Nakuri’s traffic share continues to be about 74%

For the last four or five quarters, Naukri has done better in the south than the north and west, as southern markets are primarily IT markets, markets like Bangalore and Hyderabad saw around 25%-26% growth while Naukri nationally grew around 17-18%. The Gulf business, which accounts about 5%-6% of Naukri’s overall revenue, was impacted negatively by the fragile state of some of the economies in the Gulf.

Linkedin vs Naukri: Linkedin has not yet impacted Naukri’s business, and the company is waiting and watching to see what will be Linkedin’s new strategy after getting acquired by Microsoft, said Oberoi.

Jeevansathi

Oberoi said that the company is still wary about investing further money in Jeevansathi vertical. “Our revenue is up 35%, all the metrics are also looking very healthy. So let us execute for a couple of quarters before we sort of start getting very bullish or aggressive in this business,” he added. Note that Jeevansathi made a small profit at EBITDA level after many years in October last year.

Zomato

Oberoi did not comment extensively on Zomato’s performance this quarter. However, he did comment that the online orders were down for a “couple of weeks” with UberEats launching. “There was a bit of an impact for about a couple of weeks and on Online Ordering a bit of slowdown growth for about a month, but I think they are back to normal now.”

 

99acres

In 99acres, billing grew 8% Y-o-Y in Q1 FY18 to Rs 30 crores while revenue grew 13% Y-o-Y to Rs.31.4 crores.
In Q1, 99acres made an operating EBITDA level of about Rs.9.6 crores vs a loss of Rs 18.9 crores in Q1 of last year.

Marketing reduction costs: Oberoi told that most of the reduction has been in 99acres. In the Q1 FY16 ad related expenses shot up and ad related costs represented 30% of the total expenditure. For context, advertising expenditure has typically been around 20% of total expenditure for the company.

“We saw a lot of competitive activity last year – thanks to companies like Housing and Commonfloor. This year we are seeing a lot less competitive activity. So we have also cut down our marketing spend.” Info Edge is cutting down marketing spend on 99acres from Rs 30 crores in Q1 of last year to close to Rs 10-11 crores this year.

Investee companies

Shiksha: Billing stood at 45% Y-o-Y in Q1 FY’18 to Rs.11.5 crores while net sales grew 20% Y-o-Y and reached Rs.13.8 crores.

Diro Labs and Unnati Helpers: On a question asking about status of its newly invested startups, contacts management venture Diro Labs and housekeeping services provider Unnati Helpers, in which Info Edge had invested Rs 3 crore and Rs 4 Crore respectively last year, Sanjeev Bikhchandani, Vice Chairman, Info Edge told that Diro, a phonebook management app will be launched in next few weeks on Android and iOS platforms. However, Unnati is in “very early stage” and is doing a pilot in Gurgaon currently.

Meritnation: Bikhchandani said that Meritnation’s registrations almost doubled over the last six months. “So there is going to be a very large number of new registrations. This is something which is a huge asset which the company is trying to figure out how best to leverage it,” he added.

 

Download: Earnings call transcript