Info Edge (India) - Q4FY20 Result Update - ICICI Securities

InfoEdge's Q4FY20 numbers were below our estimates on all fronts. Revenues grew 10.3% YoY to Rs. 322.8 crore (below our estimate of Rs. 324.1 crore). Recruitment solutions grew 11.2% YoY to Rs. 230.6 crore (vs. our estimate of 11% YoY growth and Rs. 230.2 crore), 99 acres grew 3.6% YoY to Rs. 56.4 crore (vs. our estimate of Rs. 58.8 crore) and other verticals grew 16.2% YoY to Rs. 35.9 crore (vs. our estimate of Rs. 35.2 crore). EBITDA margins declined ~315 bps QoQ to 29.9% (below our estimate of 30.8%) mainly due to a decline in Recruitment margins (down 155 bps QoQ to 54.2%). The company is planning to raise Rs. 1875 crore via the QIP route and issue of equities. Although the current stock price limits the valuation upside, we like the company's business model considering it is a quasi-play on India's booming startup economy and prudent capital allocation.

Valuation & Outlook

Having a niche in key businesses along with two unicorns in the growing space (Zomato, PolicyBazaar) and leadership in Naukri with EBITDA margin of above 50% bode well for the company. However, in the near term, growth momentum is expected to slow down in two major segments of Naukri, 99 acres. Further, a run up in stock price leaves no room for upside in valuation. Hence, we maintain our HOLD rating on the stock and value the stock on an SOTP basis target price of Rs. 3290.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_InfoEdge_Q4FY20.pdf

Shares of INFO EDGE (INDIA) LTD. was last trading in BSE at Rs.2721.6 as compared to the previous close of Rs. 2960.4. The total number of shares traded during the day was 22048 in over 3574 trades.

The stock hit an intraday high of Rs. 2945 and intraday low of 2665. The net turnover during the day was Rs. 62072571.

Source : Equity Bulls

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