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Last Updated : Jul 25, 2016 04:04 PM IST | Source: CNBC-TV18

New accounting method led to reduced Naukri rev growth:Info Edge

Chief Financial Officer, Chintan Thakkar says if the company were using old methods of accounting, the growth in Naukri.com revenues would have been around 17 percent, close to the 19 percent it has reported in the previous years.

Info Edge has taken up a new accounting method due to new accounting standards which came into effect from April 2015. Due to this, Naukri.com's revenue growth has come to 13 percent, says its Chief Financial Officer, Chintan Thakkar.

He says if the company were using the old methods of accounting, the growth in Naukri.com revenues would have been around 17 percent, close to the 19 percent it has reported in the previous years.

When asked for guidance, he said this change in accounting method has happened for the first time. He says that it will take atleast a year for any real comparison.

Below is the verbatim transcript of Chintan Thakkar's interview to Reema Tendulkar & Mangalam Maloo on CNBC-TV18.

Mangalam: What explain the sluggishness in the revenue growth because if we pull-up the trend from 20 percent just a few quarters away, the revenue growth has come down to 13.1 percent. What exactly is happening and what kind of revenue growth can we expect going forward in the next three quarters?

A: If you look at operational revenue growth, total income might be growing lesser because of lesser interest income and ancillary income but if you look at the operational revenue, it is growing at 17 percent which is in the range in which we were expecting and it is quite in trend if you look at the past few quarters as well.

Reema: Naukri growth has only been at 12-13 percent this quarter on year-on-year basis and this is much lower than the 19-20 percent growth rate that you have seen in the past few years? What happened in the last quarter?

A: Let me clarify, you are looking at the numbers which are now presented under the new Indian generally accepted accounting principles (GAAP) called Indian Accounting Standards (Ind AS). However, if you have to make YoY comparison, you need to be looking at the Indian GAAP number and if the you go by the Indian GAAP numbers, Naukri's revenue have also grown 17 percent, Info Edge's revenues have grown by 17 percent, in fact our operating EBITDA has gone up by 136 percent, our operating margin is double from 14 percent to 28 percent. So that is the real comparison.

However, new accounting standards which are now applicable to the top listed companies and that comparison is slightly different because it has a continuing impact coming from the earlier years. So the new accounting standards have come with effect from April 1, 2015. This is the first reporting quarter that we are giving but because we have subscription revenue, it has an impact coming from the earlier years. So revenues have changed because certain method of accounting as per the new accounting standards have changed, some of the cost items like non-cash charge for stock options - that have now come into effect which earlier was not there.

Therefore, when you look at the new accounting standard results, it would be at variance with what you might have in your mind about expectation that you might have based on because those expectations were under the earlier accounting standards.



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First Published on Jul 25, 2016 02:30 pm
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