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Last Updated : Jan 28, 2016 03:49 PM IST | Source: CNBC-TV18

Dull realty market dragged Q3 performance: Info Edge

Chintan Thakkar, CFO of Info Edge says the real estate market is very dull and the new project launches are very minimal.

With profit falling 43.8 percent year-on-year to Rs 21.7 crore, online classifieds company Info Edge's third quarter earnings disappointed analysts on Thursday.

Speaking to CNBC-TV18, Chintan Thakkar, CFO of Info Edge says the real estate market is very dull and new project launches are minimal. The market has slipped by almost 50 percent, he adds.

Below is the verbatim transcript of Chintan Thakkar's interview with Ekta Batra & Mangalam Maloo on CNBC-TV18.

Mangalam: The EBIT loss in your housing business has narrowed sequentially if you look at it from Rs 27 crore to Rs 21 crore. Do you think this can narrow further also what is the problem with the revenue in the housing business because it has not been exceeding that 12-13 percent mark ever?

A: As we have always been saying that the real estate market as such is very dull, the new project launches are very minimal, it has gone down by almost 50 percent. So given that overall market is shrinking in terms of real estate transaction, the revenue growth of anything in double digit seems to be very fine.

In terms of an EBITDA losses, yes we have continued to invest in this particular vertical as we have always been saying. The reason for which we had already raised the money as well but we will not be spending in isolation of what the market realities are. So we have always maintained a very rational approach to our spending.

The next quarter it depends on what the competitive intensity is as well. So that would defy what the EBITDA losses would be for next quarter.

Ekta: Would it be in the same range that we have seen this quarter?

A: A lot would depend on the competitive spending. We have seen competitive intensity receding. So let us hope that it will remain so and the market will remain more rational.

Ekta: About Naukri, if you look at the margins there, they too have declined from the peak margins that you used to report. What is the competitive intensity that you might be facing on that portal and your guidance on the same?

A: Naukri business is not so much about competitive intensity. There is a little bit of dip in the margin, which is also because you might well be aware that government came out with a notification to say that there will be a statutory bonuses for employees up to a particular limit of their pay. This notification came on January 1st and we have taken the full hit of that statutory bonus and it was made effective with retrospective effect. So it is almost like two years statutory bonus provision because of government's notification. The previous year has been taken as an exceptional item. It is almost like close to little less than Rs 3 crore. There is a similar hit that we have taken in every business but obviously Naukri is the largest business for us. So that also has taken some hit on it.

Besides that, Q3 has always been seasonal impact on Q3 business in recruitment business and that seasonality has always been there and there is a little bit reflection of that as well.

Mangalam: Can we expect the margins to go back to the historical levels of more than 50 percent in your Naukri business?

A: Our expectation is that if Naukri sales keeps growing, anything in 18-20 percent, looking at where our costs are, we should be able to maintain margin or maybe able to little bit add to our margins.

Watch accompanying video for entire discussion...

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First Published on Jan 28, 2016 03:45 pm
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