E-commerce firm Info Edge’s net profit for the December quarter rose 20 percent year-on-year to Rs 38.6 crore and net sales climbed 18 percent to Rs 147.5 crore.
Info Edge owns the popular websites naukri.com, jeevansathi.com, shiksha.com and 99acres.com.
Revenues in the flagship website Naukri.com grew 17 percent, while those in 99acres.com increased 20 percent, Chintan Thakkar, Chief Financial Officer, Info Edge told CNBC-TV18.
Despite higher revenues, 99acres.com reported an operating loss of Rs 14 crore, Thakkar said. Info Edge will continue to make more investments in 99acres in the coming quarters, Thakkar said in an interview to CNBC-TV18.
Below is the verbatim transcript of Chintan Thakkar’s interview with Ekta Batra & Reema Tendulkar on CNBC-TV18.
Ekta: Can you take us through our performance this quarter in terms of Naukri.com as well as 99acres.com first?
A: Performance has been pretty steady the growth run of that we have been showing in previous two quarters. We are continuing with the same kind overall growth at the company level. Recruitment business seems to be very promising this is the consistently third quarter where we are seeing in high teens the revenue growth is there. What it means is that inherently business has strength it has been very consistent and very stable.
As far as 99acres is concerned we are investing much more as we have been saying in our earlier quarters that we would continue to invest in this real estate business portal because there is a huge long-term valuation that we can create. So, inline with that we are investing more and what it would also mean is that in the immediate term on quarterly basis yes our overall EBITDA margins is under pressure because we are investing more in 99acres.com.
Reema: Can you give us the few numbers, what was the revenue growth from Naukri in this particular quarter on year-on-year (YoY) basis as well as for 99acres the revenue growth as well as the EBITDA loss?
A: Both are similar so 99acres revenue growth is about 20 percent and similarly for the recruitment business the growth in revenue is about 17 percent. EBITDA loss overall at the 99acres level it is about in the range of about Rs 14 crore. Naukri as you know it is continuing to show very healthy margins.
Ekta: What is the plan with your other portals? First can you tell us about the other portals for example the matrimonial segment as well as your education portal Shiksha.com how did that do this quarter and what is the plan for that if incase the performance hasn’t been as per expectations?
A: Jeevansathi.com revenue has grown in the range of 9.5 -10 percent. We are not loosing too much of money. Right now our strategy is to stay put where we are. We are not investing too much into it. We are not burning too much into it. None the less in some of these segments in this market place we are kind of leading in those places so we will continue to be in that space and continue to operate there.
Education it is at a very nascent stage in that sense. However, we are market leader over there and if you look at as a space at a very high level it is a very interesting space and very promising space in the long run.
Reema: Is it possible to quantify the kind of investments that you will make in Info Edge at least for the next say in FY16 and what you would perhaps make in FY15?
A: It is really hard to predict for couple of reasons, one is that we will continue to invest in 99acres. How much we will invest it depends on many factors including how the overall real estate market is, which looks like based on this quarterly result that overall real estate market is still soft. What we have also seen in the past cycles in real estate market is that they are long gestation in that cycle. They do not come up in a quarter or they do not go down in a quarter. So, that investment will continue in 99acres. We are not burning much in Shiksha as well as in Jeevansathi. Having said that Naukri is certainly a buy spot and we are continuing to grow there.
Reema: Given the kind of investments that you are planning to make in 99acres how much lower could the margins go? At what point will you say that now the EBITDA margin, level of the company seems a bit uncomfortable? You have been consistently falling, you used to be in your 30’s now this quarters you have come down to almost 25 percent. Is the company willing to go down to margins of even 20 percent because you are making those kinds of investments in 99acres?
A: Well, what I would say is that investors need to look at our EBITDA margins in separate bucket. Naukri is where our margin is consistent and we are growing at healthy rate. So, that margin overall will keep going up. So far as 99acres is concerned we are in an investment phase and that phase is likely to go on for many quarters.
If you look at our overall commitment we have already raised USD 125 million which is almost like Rs 750 crore to invest in that segment so that is a substantial amount and if need be we will keep continue to spend in that vertical.
Reema: The reason we asked is because, 99acres seems to be snowing down. In Q1 your revenue growth was 45 percent, in Q2 it came down to 32.50 percent. This quarter you told us the revenue growth in 99acres was closer to 20 percent. Even if I look at the EBITDA loss, Q1 was 4.50 percent. Q2 the EBITDA loss was Rs 10 crore and this quarter, it is some numbers you gave us. The revenue growth seems to be snowing down as well as the EBITDA loss in 99acres seems to be going up?
A: That is correct, as I said that so far as revenue is concerned, the overall real estate market seems to be bit soft, particularly in the pockets like Delhi and National Capital Region (NCR) it continues to be much softer than some of the other places. So there would be a pressure on the revenue lines. Having said that today the real issue is that is the investment, operating expenses that we will continue to do in the 99acres. That is the real reason why the EBITDA is dragged down.
Ekta: Zomato had finalised an acquisition of Urbanspoon sometime back it just took place a few days ago. Can you just tell us since you all have interest in Zomato what was the total acquisition amount and how much is Zomato making in terms of revenue and what would your stance be in Zomato at this point? Would you look to cash without considering the strong growth that they are seeing may be valuations?
A: Zomato has acquired Urbanspoons off late about USD 52 million and right now it remains a substantial investing company for us. We are continuing to be its holding company. We have more than 50 percent stake in Zomato. How the game would go from hereon is something which is still on table that is something which the board will still be debating on that and as and when we kind of make any changes to our strategy if at all we make any changes to our strategy we will let the market know about it.
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