NAUKRI - Info Edge(India) Ltd. Share Price

In the earnings call for Q1 FY26, Info Edge (India) Limited's management provided an outlook characterized by cautious optimism in light of recent macroeconomic challenges.

For Q1 FY26, the standalone billings were reported at Rs. 644 crores, reflecting a year-on-year (YOY) growth of 11%, while revenue reached Rs. 736 crores with a YOY increase of 15%. Despite the downturn, operating profits rose to Rs. 250 crores, marking a 10% YOY growth, and the cash balance at June 2025 stood at Rs. 4,828 crores.

Key forward-looking points include:

1. Recruitment Business: Billings rose 9% to Rs. 470 crores, although this growth was moderated due to a slowdown in certain sectors like IT services and BFSI. The Q1 operating profit margin remained strong at 53%, and the recruitment segment continues to gain traction in sectors such as healthcare and manufacturing. However, the management noted an expected return to better growth trajectories pending resolution of macroeconomic uncertainties.

2. Real Estate Segment: Billings increased by 17% to Rs. 94 crores, driven by more billed customers, indicating continued market share growth, though operating losses were noted at Rs. 19 crores.

3. Matrimony and Shiksha Segments: The matrimony business achieved a break-even point with billings up 36% to Rs. 35 crores. The Shiksha sector faced mixed results, generating Rs. 50 crores in revenue, but growth was tempered by external challenges.

4. AI Investment: Management underscored a commitment to leveraging AI to enhance platform efficiencies and user experience while developing new monetization avenues.

5. Marketing Spend: Increased marketing expenses are anticipated to remain at around 12% of revenue, focusing on strong branding across platforms to capture market share despite subdued growth expectations.

Overall, while cautious due to current uncertainties, management expressed confidence in strategic investments and a resilient portfolio across various segments.

Major Q&A from Earnings Transcript (August 8, 2025)

Question 1: Hitesh, I want you to elaborate on the conversations you're having with your tech clients regarding AI's impact.

Answer: We're observing varied impacts of AI. Our growth moderated to 11% in Q1, and while some sectors like GCCs are performing well, others like IT and BFSI have softened. July showed improvements in collections, with 19% billing growth. It's unclear if the demand slowdown is AI-related or due to geopolitical tensions. The next few quarters will be telling regarding hiring and growth patterns.

Question 2: What are your thoughts on the necessity of continuous brand investments resembling FMCG models?

Answer: Our marketing spends vary across businesses. Naukri's spend has increased to around 10%, but we can scale back if needed. New businesses like JobHai require more upfront investment, and in sectors like 99acres and Jeevansathi, we will continue to invest heavily to gain market share. Our focus is on sustained growth rather than cutting back on effective marketing strategies.

Question 3: Can you provide insights on the slowing billing growth in Naukri?

Answer: We've seen a moderation in growth primarily in IT services and consultancy sectors, while GCCs and tech sectors perform better. Overall, Q1 presented challenges due to an uncertain macro environment, with companies deferring hiring. We achieved a billing growth of only 9%, whereas GCCs maintained around 17%. Generally, the slowdown is felt across several segments, not solely in IT.

Question 4: How are your advertising expenses affected by growth fluctuations?

Answer: Advertising spend in Naukri doesn't necessarily increase with slowing growth because there's still a robust job seeker base. Instead, we will spend strategically on burgeoning sectors. In 99acres and Jeevansathi, we'll maintain high investments to stay competitive. We've also adjusted our marketing spends based on campaign effectiveness and market dynamics.

Question 5: What impact is AI having on your business models, particularly in Shiksha?

Answer: While Shiksha sees some headwinds from AI, Naukri and 99acres have remained largely unaffected. We're proactively leveraging AI within our platforms, improving search and user experiences. As AI models evolve, we will continue to adjust accordingly but at this point, the impact hasn't significantly disrupted our primary revenue streams.

Question 6: Given recent performance, how are you navigating pricing actions?

Answer: Pricing raises become challenging in softer markets. We're assessing conditions continuously; if demand strengthens, we would look to adjust prices positively. However, during weaker periods, it's essential to maintain competitive pricing, especially for our core services like Naukri. We're holding steady on our pricing strategy while monitoring market dynamics closely.

These encapsulate the major inquiries and responses from the Q&A section of the earnings call, emphasizing operational performance and market strategy adaptations amid changing economic landscapes.