Info Edge India reported its third quarter results for the quarter ending December 2016. The company reported net profit growth of 76.1 percent at Rs 47.1 crore vis-Ã -vis Rs 26.7 crore the same quarter last fiscal.
In an interview to CNBC-TV18, Hitesh Oberoi, CEO & MD said demonetisation had taken a toll on its sales growth. He, however, said efficient cost control measures offset cash crunch effects.
Oberoi said slowdown in IT along with cash crunch impact resulted in a slowdown in recruitment. However, he added the effects of demonetisation are behind us and things will soon get back to normal.
According to Oberoi, cash crunch had deeply affected ad spends of the company. He said traffic in 99acres.com dropped overnight because of effects of demonetisation on real estate market. However things have returned back to normalcy again, he added.
Oberoi said sales for Jeevansathi.com grew by 19 percent and was impacted by demonetisation only for a very short period before it recovered quickly. He said Naukri.com took a hit as IT was affected negatively due to situation in the US.
He said the company looks forward to improvement in recruitments once situation improves in IT. He concluded by saying it will perform better in Q4.
Below is the verbatim transcript of Hitesh Oberoi’s interview to Surabhi Upadhyay and Nigel D’Souza on CNBC-TV18.
Surabhi: Revenues up 5.8 percent, EBITDA has also improved year-on-year (YoY) and the margin has jumped to 25.2 percent versus roughly 21 percent where it used to be last year. Can you take us through some of the factors at play and really the sustainability of these margins?
A: We had a good quarter. Net sales were up 13 percent, and EBITDA went up by 58 percent over last year and PAT was up 64 percent. Our sales were hit to some extent because of slowdown thanks to demonetisation, especially the real estate business got hit. However, we were able to make up. However, because we were able to keep our cost under control, we were able to grow our business efficiently.
Nigel: Going ahead, what kind of a revenue trajectory can we look at. We used to grow at one point of time 15-20 percent so in the coming quarters what is your target?
A: A lot will depend on what happens to IT and a lot will depend on what happens -- if there is a good recovery post -- demonetisation is now behind us but if we see a solid recovery post what has happened, then things should get back to normal pretty quickly. What was hit in Q3 was our 99acres business. We were growing at 23 percent in Q2 and suddenly we slipped and our growth slowed down to about 9 percent in Q3.
Overnight our queries and our traffic on the site fell by 40 percent. Since then, that has recovered but revenues will take some time to recover. We also saw a slight impact on our revenue growth in recruitment because of slowdown in IT in Q3. We are hoping that that was also one-off and things will be back to normal in Q4 once again but time will tell.
Nigel: Your 99 acres, there revenues are down by around 17-18 percent, you must be having some timelines in terms of when do you expect some kind of pickup over there, when can you expect some kind of return to sentiment as well and has the company lowered your ad spending due to demonetisation, some clarity on that front?
A: The 99acres business got hit because of demonetisation post November 8. Like I said, we saw a drop in traffic overnight, collections also suffered for a couple of months. The traffic on the site is now back -- it took two three months for that to happen but now we are back to where we were pre-demonetisation in terms of traffic. However, we expect the sales for the business to recover will maybe take another one or two months.
In terms of spend, you are right, because we saw a slowdown in revenue and people were not really interested in buying property in Q3, transactions also fell sharply in Q3, we also cut down our spending on 99acres in the form of advertising in Q3.
For full interview, watch video.
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