Naukri.com biggest contributor to revenues: Info Edge

The EBITDA margin of 45.6 percent was primarily driven by Naukri.com again, says Ambaresh Raghuvanshi, CFO, Info Edge. Naukri.com continues to be the big contributor whether it is topline, margins, or absolute profit.

Speaking to CNBC-TV18, he says having the cash and the required margins, the company is treating the current slowdown as an opportunity to invest in all business segments. The other businesses like Jeevansathi.com, the Candidate Services in Naukri.com or the Shiksha.com business are growing fast because they are somewhat insulated from the economic cycle. Here is the edited transcript of his interview with CNBC-TV18 Q: Good numbers on the face of it especially on the margin front. EBITDA margin of 45.6 percent primarily driven by Naukri.com again and what would be the contribution of other verticals? A: If you see for the year, the margins have come down because our profit without accounting for the exceptional items is about Rs 131 crore. Last year it was about Rs 120 crore. So in terms of percentage margins, there has been slight slide in the profitability margin. Q: I was talking about Q4 in particular which I believe has gone up quarter-on-quarter (Q-o-Q)? A: Each quarter is different and there is a certain amount of seasonality in our business. So when you compare Q3 which is probably one of our weaker quarters compared to Q4, they are very different. But when you see for the full year and you certainly compare year-on-year (Y-o-Y) compared to last year at the same quarter, there has been a slight drop in margins. Q: Can you take us through the key websites which you hold, Naukri.com for example. How did you all do in your specific websites this quarter in terms of an EBITDA performance as well as bottomline which one was the maximum contributor this time or has seen an incremental pick up? A: Naukri.com continues to be the big contributor whether it is topline, margins, or absolute profit. Naukri.com continues to be the dominant business. There is no secret there. It is a challenge because of the slowdown in the economy and there is less hiring happening and churn levels have come off in the company. So certainly, the business has decelerated. However, it continues to be a high margin business, the corporate sales part of the business generates more than 50 percent EBITDA margin. So that continues to be the money generator for the company. 99acres.com continues to be a fast growing business. So that offers relatively smaller base and it is slightly more under-penetrated. The other couple of businesses are not so indexed to the economy whether it is Jeevansathi.com, whether it is the Candidate Services in Naukri.com or the Shiksha.com business. These are businesses, which grow irrespective of the economy. So they are growing fast again of smaller basis but also because they are somewhat insulated from the economic cycle. Q: Just to go back to that margin picture, you did say that they have come down, what was the reason and is it because of the kind of investments you made in the new ventures and going forward, where do you see the margins settling, they are still reasonably high but where do you see them settle? A: We took a very conscious call strategically that we wanted to invest in our businesses irrespective of what happens in the near-term. So we have the cash, we have the margins and we thought that we will use the current slowdown as an opportunity to continue to invest. So whether it is in product, whether it is in engineering, whether it is in brand, whether it is in the sales team, across businesses we have continued to invest. We believe that the benefits of this investments will be seen over time as the market turns around because if you are well positioned. Let us remember Naukri.com for example has a 63 percent traffic share but that did not happen on its own. We made it happen because in the last slowdown, we continue to invest and we saw the benefits of it when there was a bounce back in the economy. Similarly in every business we are treating the current slowdown as an opportunity to invest. So it might mean that in the near-term, margins might continue to slide unless growth comes back in a hurry. We believe that for the medium-term interest of these businesses, we should continue to invest.