Hitesh Oberoi, the chief executive officer and managing director of Info Edge in an interview with CNBC TV-18 talked at length on the state of hiring in IT and non-IT sectors and shared his views on the company's second quarter results. Excerpts from the interview:
IT hiring will get back to a more normal kind of phase, it's not showing up in numbers it is still going very strongly. Could you describe what happened and how are things looking now in the third quarter?
The last seven quarters or so have been fabulous the company has grown at growth rates we've never seen before but things are beginning to stabilize on the IT front a bit, attrition rates are coming down at companies and you know some companies may have also over hired and therefore we expect growth in IT hiring to moderate going forward.
On the other hand, the non-IT market continues to be on fire and many sectors are benefiting with the economy opening up after the Covid pandemic and that part of the business has shown 40-45 percent of the total business for us because IT had grown handsomely over the last seven-eight quarters while non-it companies were pretty much shot for business but that's beginning to change and now IT companies are slowing down in terms of hiring growth but non-IT companies continue to hire because business is back with a bang.
In the non-IT space which are the sectors which are doing the best ?
Pretty much all the sectors are doing well, tourism, travel, hospitality you know banking, financial services, insurance, retailing, real estate, construction so almost all non-IT companies. Telecom is back because of 5G so you know we are seeing pretty much action across the board in non-IT, healthcare and education also been really solid.
We're also noticing that there is a pickup in your 99 Acres business, tell us a little bit about whether you've gained market share here and what could the growth rates be? In Q2 you grew about 45% year on year is that an aberration or is it sustainable?
Our monthly run rate has definitely sort of moved up in real estate we are currently averaging about 25 crores a month in real estate and you're right the real estate market is also very hot right now their prices are going up pretty much everywhere and uh there's a shortage of new real estate which is in the market because not much projects were taken up during Covid time so on one hand there's a demand until about two years ago there was massive supply and not enough demand suddenly there's more demand and not enough supply which is what is causing prices to move up.
We don't want prices to move up very quickly also we don't want we want real estate state to stay affordable because that's what gets end buyers into the market and if it's too easy to sell real estate then we are not required because we have sort of developers and brokers and channel partners.
If there's too much demand then you know for intermediaries like us are not required but we're not complaining because for a long time there is real estate market goes down with the dumps for in fact for many years because one issue the other after a long time growth is back in real estate if all use pick up uh that'll be good for our business going forward.
Let's focus on your numbers the ad spends you know as a percentage of sales they have come down gradually and in this quarter itself you know as a percentage of sales they're lower explain this to us and what should be the steady state number out there?
One should not look at ad spend as a percentage of total sales to the company because different businesses sort of have different strategies so the jobs business for example has grown rapidly over the years but it does not require a lot of ad-spending you know because we are pretty much a leader we don't need to sort of spend too much money to build our brand to get new customers to the platform, on the other hand in real estate the market is really competitive there are many players who are spending a ton of money so our ad spend in real estate is likely to sort of remain high for a while. Our ad spends in Jeevan Saathi have moderated because we change our model as you know we went free some time back and therefore hopefully the free model will not require as much ad support as the paid model but still the space remains competitive and we continue to advertise aggressively.
Tell us a little bit more about what's happening with Jeevansathi, the revenues have been declining, the EBITDA loss continues, year on year the revenues are down, there's a lot of competition in this space,a lot of digital based providers have opened up in the last six to twelve months. Tell us a little bit about what the future outlook is,do you have any plans with that business at all ?
It's a very interesting space and interestingly poised, In May Jeevansaathi went free to chat, sometime back, we're the only sort of big matrimony site in town where you can register and chat for free and that's helping us gain a tremendous sort of traffic share and market share of course revenues have taken a beating but that's by design and that's it's only a matter of time before revenue starts moving up once sort of we gain market share.
On the other hand we've also you know acquired 76% in our dating company called Aisle and they have a lot of regional dating brands and a national brand in Aisle and that business is tiny today but going handsomely so we are following this two prong strategy in the matrimony Market where we are a number three player we try to we are trying to disrupt the market and change the game in the dating market we now have a play which is something we did not have earlier because that's a growing market and that's where the sort of business is going to be 10 years from now.
I think the last time you were on you had said that you know interest in the Venture Capital space is still very strong it's a late stage which is actually seeing us is seeing trouble, does that continue or is anything changed at the margin?
No I think at the early stage there's enough still enough activity there are hundreds and thousands of angel investors who are still investing there are enough companies that were willing to put in a million dollars, two million dollars, five million dollars it's at the top end you know when companies want to raise 50 million,100 million,200 billion dollars there are a lot of questions being asked about the real health of the business.
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