Info Edge shares rise 5% on BofA's double upgrade to 'buy'

The Naukri.com operator reported a 47 percent year-on-year (YoY) increase in net profit for the June quarter

Shares of Info Edge India Limited surged 5 percent to Rs 8,151 during the session on September 19 after Bank of America (BofA) upgraded the stock to 'buy' from 'underperform' translating to a double upgrade amid robust growth prospects.

The international brokerage has also raised the target price to Rs 9,000 from Rs 5,185. The new price target implies an upside potential of over 16 percent from the last close of Rs 7,741 on the National Stock Exchange.

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The brokerage firm suggests that Info Edge has a 70 percent market share, a dominant position, and there are no disruption risks. Furthermore, there is a steady revival in recruitment in the IT space from current levels. BofA added that the company's valuation adjusted for other internet companies such as Zomato and PB Fintech, has underperformed the Nifty, propping analysts to suggest that there is valuation comfort.

The Naukri.com operator reported a 47 percent year-on-year (YoY) increase in net profit for the June quarter, reaching Rs 233 crore, compared to Rs 159 crore in the same period last year. Revenue grew by 8 percent, rising to Rs 677 crore from Rs 626 crore in the corresponding quarter of the previous year.

The recruitment business saw continued growth in the first quarter, while the non-recruitment segments also expanded with reduced operating losses. Revenue from the recruitment business grew by 5.6 percent year-on-year. Among the non-recruitment verticals, 99acres (real estate) posted a 19.5 percent growth, Jeevansathi (matrimony) saw a 34.7 percent increase, and Shiksha (education) recorded an 18.4 percent rise.

At about 1 pm, shares of the company were trading at Rs 7,852, higher by almost 2 percent from the last close on the NSE.

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