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InfoEdge: Recovery in Naukri, cash burn down in Zomato, higher traffic in Jeevansathi in Q1

||Kumardeep Banerjee

InfoEdge’s core business Naukri saw bounceback in job seeker traffic to pre-Covid levels, and recruitment activity improved to 35% yearly decline in June as compared to 65% decline in April, despite zero spending on marketing. The lockdown impacted both job seeker and recruiter activity, with Naukri adding 8,400 CVs, half of what it was adding last year. CV modifications were down 20% YoY to 324,000.

The IT and telecom services segment showed improvement, from a 45% decline in April to a 27% decline in June. Travel and hospitality were impacted the most, retail showed some signs for recovery. Recruiter traffic is now back to 65% levels.

99acres: Listings of new homes, rentals, resell, commercial were all impacted. Businesses improved gradually in June, and smaller cities showed lesser decline, compared to larger metros. Daily listings posted by owners recovered to pre-COVID levels, but broker listings are recovering at a slower rate. Traffic was back to 85% of pre-Covid levels by end of June. Buyer activity on 99acres “is back with a bang”. Visitors are up over last year, and there is a massive surge in response from last year.

“There is a 65% jump in resale inquiries. Inquiries still down on rental side compared to last year, but that its small part of business. Owners are coming and listing properties directly, much more than last year. Dealers and developers have been slower to get back on platform, but they are now coming back since buyers and listings are coming back,” said Hitesh Oberoi, InfoEdge India MD.

Jeevansathi saw acceleration in profile growth rates as well as higher traffic Q1, there are plans to increase marketing spend. Some features such as video calling, profiles, video based meetups, which were introduced last year, helped drive growth and user engagement.

  • Billings: Rs 188.6 crore, down 43.9% YoY
  • Revenue: Rs 280.1crore, down 10.4% YoY
  • Naukri
    • Billings: 140.3 crore, down 44.3%
    • Revenue: Rs 200.2 crore, down 8.8% YoY
  • IIMJobs: Billings fell 41% YoY to Rs 3.16 crore
  • 99acres: Billings fell 71% YoY to Rs 14 crore
  • Jeevansathi: Billings grew 13.3% YoY to Rs 22.8 crore
  • Shiksha: Billings fell 28.4% to Rs 11.5 crore

‘Enough investor interest in Zomato’; 60-75% restaurants reopened

Funds: On queries around Zomato’s fundraising, Sanjeev Bikchandani, founder & vice-chairman, InfoEdge India said any announcement will be made “in due course of time”, if and when it happens. “Zomato has got enough money, it will probably raise more, there is enough investor interest.

Recovery: Revenue is back to a pre-covid level. But that doesn’t necessarily mean volumes are back, it’s possible that Zomato is charging higher delivery fees, and offering lower discounts, said Bikhchandani. Overall, it is a much healthier business, he added. It is estimated that 60-75% restaurants have opened.

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Zomato is coming back nicely, said Bikhchandani, we expect them to be back to pre-covid levels, depending on second waves and further lockdowns. Zomato’s monthly cash burn is substantially down. It may go up a bit because they are reinstating salary cuts, and they may start investing in brands. Estimates say that 20-25% of restaurants may never open. Most restaurants, especially the ones paying high street rentals, can’t survive purely on delivery, and need dining revenue.

Competition: As of now, Amazon food delivery does not seem to be a major push to scale up, but it’s something Zomato is watching, Bikhchandani said.

Yet to deep dive into impact of data protection law, non-personal data regulation

On being asked a question about upcoming regulatory headwinds, such as the Non-Personal Data Report, and the Personal Data Protection Bill, Oberoi said some of these “have been brought to our notice” but the company hasn’t yet gone through them in detail, and has not yet “done a deep dive” into the bill. “Some of these things concern us. We are a data company, we take all precautions; we make [data] available only to recruiters for recruitment purposes in the case of Naukri. If the law changes, it could impact us positively or negatively.”

Bikhchandani added that InfoEdge’s view is that the data belongs to the individual. “If he has entered his resume, he has done it for a purpose under certain T&Cs, we will only use it for that. Even if we are allowed to, we will honour our commitment to our users, and use data only for what we have committed to,” he said.

When it was pointed out the government as well as other private companies can mandatorily ask for aggregate anonymised data under the NPD report, he said: “Mandatory demand may come from the government, but I don’t believe a private company can demand our data. We cannot ask LinkedIn for anonymised data. We will have to look at that, that would be unusual.”

Acquisition strategy going ahead

InfoEdge also closed a successful Qualified institutional placement (QIP) early last month, raising six times the funds it had planned to raise. It raised Rs 1,875 crore in total. This, along with existing funds of Rs 1,500 crore will be used for organic and inorganic opportunities in InfoEdge’s core verticals.

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Oberoi said the company wants to push marketing and acquisition, for which both organic and inorganic investments will be looked at. Inorganic investments are very few, and presently the company is not in any talks for acquisition. Oberoi said the company will grab any opportunity in any of InfoEdge’s core verticals. “We expect something to emerge in one of these areas in the next 12-18 months,” he said. An ideal acquisition candidate is one that operates in a core InfoEdge vertical, gives the company clear market leadership, should have a reasonable topline, or operates with a new business model altogether. “The number of targets you can count on two hands, and a very few existing companies meet all criteria,” Oberoi said.

InfoEdge is primarily a tech investor, and its current investments have a tech angle. “We invest in internal businesses, in startups, we acquire companies operating in verticals in which we operate, and we invest in startups that are not in the four verticals, he said. Zomato, Policybazaar, ShopKirana, Ustraa, are not in verticals in which we operate, but they all have a consumer internet or SaaS angle, he said.

Earnings Call Audio | Press Release

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