Info Edge India
BSE: 532777 | NSE: NAUKRI | ISIN: INE663F01024 | Miscellaneous
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Chairman's Speech | Year : Mar '09 |
Dear Shareholders, As new age entrepreneurs, the single most important lesson that we learnt in 2008-09, was not to take growth for granted. In the last five years, the Indian economy had grown at a compound annual growth rate (CAGR) of over 8.5%. And, most companies focused on making the best of this stupendous growth. Info Edge was no exception. In those five years, driven primarily by the phenomenal growth of naukri.com, Info Edge registered: A CAGR in net sales of over 84% increasing from Rs. 196.51 million in 2003-04 to Rs. 2,189.39 million in 2007-08. A CAGR in EBIDTA of over 106% rising from Rs. 47.7 million in 2003-04 to Rs. 842.04 million in 2007-08. A CAGR in PAT of over 119% growing from Rs. 24.36 million in 2003-04 to Rs. 554.87 million in 2007-08. EPS increasing from Rs. 1.18 in 2003-04 to Rs. 20.33 in 2007-08. Things changed in 2008-09. After record levels of inflation in the first quarter, global eco- nomic growth reduced dramatically in the third quarter of 2008-09. Much of this has been a fallout of the international financial crisis. World output growth has reduced from 5.2% in 2007 to 3.2% in 2008 and is estimated to be negative 1.3% in 2009. Taking a cue from the global economy, India’s GDP growth also reduced from 9% in 2007-08 to 6.7% in 2008-09. Naturally, with a sharp reduction in growth, there was a slowdown in hiring activities across sectors. Our recruitment business was affected. Real estate listings, too, saw a dramatic col- lapse in India which made things difficult for our property search business. This was the worst year that we have seen in the history of your Company. However, to its credit, Info Edge has shown great resilience, and even managed to register moderate growth both in revenues and profits. The key results on a consolidated basis are: Net sales increased by 12.3% from Rs. 2,189.39 million in 2007-08 to Rs. 2,457.99 million in 2008-09. Earnings before depreciation, interest, tax and amortisation (EBIDTA) grew by 1.6% to Rs. 644.85 million. Profi t after tax (PAT, after minority interest and profits from associate companies) increased by 2.8% to Rs.570.28 million in 2008-09. Over the last five years, the team has been pushing Info Edge to deliver higher and higher growth year after year. The fundamental belief was that opportunities in our markets were going to keep on increasing. 2008-09 has made us introspect on this belief. Our optimism on Indias longer term growth opportunities remain undiminished. But 2008-09 has taught us the need to calibrate our business models to deal with downturns, while keeping all en- gines running to accelerate on the upturn. It has been a great learning doing this task of how to conserve in lean times without sacrificing the strategic opportunities for longer term growth. OUR BELIEF IN THE LONG TERM PROSPECTS OF INFO EDGE IS FURTHER ESTABLISHED BY THE FACT THAT IN 2008-09, WE DIVERSIFIED OUR BUSINESS PORTFOLIO AND MADE INVESTMENTS IN ANOTHER BUSINESS SEGMENT THE EDUCATIONS CLASSIFIED PORTAL SHIKSHA.COM. There were three broad areas where we have refocused our energies. - First, across businesses, we have reoriented our sales processes for optimal resource utilisa- tion, including using tele-calling more effectively. While for some businesses this has meant reduction in promotional activities and stress on more cost efficient selling, for others it has meant increased training for better communication of our value proposition. - Second, based on our customer insights, we have revamped our websites. With the use of improved algorithms and analysis, we have improved the customer experience across differ- ent portals. There has been a concerted effort at improving the quality of traffic and content on our websites. - Third, our business is now focusing on penetrating deeper into markets. We are emphasising on making clients use more and more of our services, so that with increased usage they get used to our interfaces and navigation. The stress here is on increasing our market share and attracting clients away from competitors. By revisiting our business models and emphasising on internal processes and cost manage- ment in 2008-09, we believe Info Edge has emerged as an even stronger company. We operate in a nascent business. While the online classifieds business space in India has seen increased activity, it is far from realising its full potential. Moreover, most players do not have the managerial or financial bandwidth to sustain their businesses in adverse markets. We have reasons to believe that the downturn of 2008-09 affected our competition much worse than us. With the strength of our debt-free balance sheet and skill and commitment of our people, we are determined to fulfil our long term growth aspirations. Even under adverse market conditions, all our businesses continued to increase their cus- tomer base. Here are some facts: The number of résumés in naukri.com’s database increased by 31% to around 17 million at the end of 2008-09; the number of résumés added daily increased by 17% to 14,000; and the number of corporate customers increased by 5% to approximately 34,000 Profile listings on jeevansathi.com increased from 2.14 million at the end of 2007-08 to 2.9 million at the end of 2008-09 Property listings on 99acres.com grew from 200,000 at the end of 2007-08 to 248,000 at the end of 2008-09; and the number of paid transactions rose from 7,500 in 2007-80 to 16,600 in 2008-09 The fundamentals of our businesses are strong and, during 2008-09, we have worked on our products and processes to further strengthen them. This has helped prepare your Company for the next round of accelerated growth. We also believe that cash including liquid invest- ment on our balance sheet of over Rs 3200 million offers us a strategic advantage over our competitors. Our belief in the long term prospects of Info Edge is further established by the fact that in 2008-09, we diversified our business portfolio and made investments in another business seg- ment — the educations classified portal shiksha.com. Since its launch in May 2008, we have continued to invest in developing this business. It is in an incubation phase where stress is on product development and creating brand awareness. In 2008-09, Info Edge made strategic investments in Applect Learning Systems Private Lim- ited, which operates the kindergarten to Class 12 (K-12) assessment based learning portal called www.meritnation.com; and Etechaces Marketing & Consulting Private Limited, which operates the insurance sales portal, www.policybazaar.com. Today, Info Edge is an entity with several different businesses operating within it. Many of these businesses have different organisation structures and business models. Some are operated through step down subsidiaries or associate companies. In an entrepreneurially driven company like Info Edge, these structures are strategically important. However, this also requires the Company to have a strong foundation of corporate governance systems in place that protects investor interests. Info Edge has laid considerable emphasis on this aspect, and let me share with you a few things that we have done. - The role of the Chairman is separated from that of the CEO Half the Board is independent, even though we have a non-executive Chairman Balance sheet and cash flow statements are disclosed every quarter even though these are not mandatory - Internal audit is performed by an external firm - The Audit Committee comprises only independent Directors The global economic conditions are far from good. We expect that it will be some time before the large economies of USA and EU recover. Growth in India will also be lower than in the past. Given that naukri.com accounts for over 80% of our business, in the near future, Info Edge will grow at a lower rate than what we witnessed in the last five years. Having said so, we also believe that with India even growing at over 6.5% to 7%, there will be several opportunities in the market for Info Edge. Besides, some of our businesses like shiksha.com and jeevansathi.com are largely insulated from economic developments. Several of our businesses are in the incubation phase and we need to focus on their execution pro- cesses. 2008-09 has been a learning experience. We have looked within and we believe much of our future will be determined by how we ideate; how we innovate; and how we execute. We have confidence that we can excel in all these fronts. We would like to take this opportunity to thank you for your continued support. Our busi- nesses continue to have huge growth opportunities. With the dedication of our employees and your encouragement, Info Edge will make the best of these opportunities. Regards Sanjeev Bhikchandani |
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| Source : Religare Technova | |
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