Margins to grow in Naukri.com, fall in 99acres: Info Edge

"We just raised Rs 750 crore by way of qualified institutional placement (QIP) sometime back to invest mostly 99acres; we will continue to invest aggressively in this business for the long run," he said. 

On the positive side, Oberoi said its job recruitment portal naukri.com did well during the March quarter.

"Naukri's EBITDA margins are over 53-54 percent now and because Naukri grew by 25 percent in the last quarter - that boosted the margins of the company as a whole," Oberoi said. 

Below is the edited transcript of Hitesh Oberoi's interview with Ekta Batra and Mangalam Maloo on CNBC-TV18.Ekta: There is an exceptional of Rs 29 crore this quarter in terms of your numbers. What is it on account of?A: That is just an accounting entry. We have moved some of our shareholding in PolicyBazaar into a subsidiary, so that’s partly on account of it.Mangalam: Could you give us a sense of what the growth in naukri.com was and also your real estate. What was the EBITDA loss on that?A: Naukri had a good quarter. Net sales in it grew by over 25 percent last quarter. In 99acres our sales grew by over 33 percent and the EBITDA loss in 99acres was close to about Rs 8 crore for the quarter.Ekta: When do you expect a breakeven on the EBITDA for 99acres?A: That is a long time away because competitive activity in real estate is intensifying and the real estate market is not in very good shape as we all know. So while the real estate companies are not spending the portal is spending a lot of money and we have to compete in this market, we have to be aggressive. So chances are that losses in 99acres increase substantially over the short-term. Mangalam: Till how long you can take the losses on 99acres because they do reflect in your EBITDA margins which have fallen by nearly 10 percentage points in this year. So for how long do you intend to invest in 99acres or do you plan to reduce your investments in that?A: Investments in 99acres are likely to go up and not go down. We see a great opportunity in the long run in this business, we are well positioned, we are the number one player in the market, we did about Rs 100 crore of topline in 99acres last year.

The truth is that it’s a 6,000 crore market, a lot of the spend has to move online and we just raised Rs 750 crore by way of qualified institutional placement (QIP) sometime back to invest mostly 99acres. So I do not see investment in 99acres going down. We will continue to invest aggressively in this business for the long run.

Ekta: You have recovered sequentially in terms of your margins this time. It is back to over 30 percent odd versus around 25 percent that you did in the previous quarter. What lead primarily to the operational improvement and can you tell us what the trajectory might be in FY16 on an average? A: Two reasons for that. One, Naukri’s performance has improved and Naukri is a high EBITDA margin business. Naukri EBITDA margins are over 53-54 percent now and because Naukri grew by 25 percent in the last quarter - that boosted the margins of the company as a whole.

Second, our investment in 99acres in Q4 was not substantial; we lost 8 crore at the EBITDA level in 99acreas and that also helped boost margins.

Going forward Naukri margins are likely to improve if Naukri keeps growing at 25 percent per annum but that will depend on economy to a large extent and in 99accreas our margins are likely to fall because we plan to invest substantially in this business going forward.