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Last Updated : Jan 24, 2017 06:12 PM IST | Source: Moneycontrol.com

India's job market badly hit due to demonetisation: Naukri CEO

In an exclusive interaction with Moneycontrol, Hitesh Oberoi, CEO of InfoEdge and Naukri - India's largest job portal said that the hiring scenario in 2017 will largely depend on what happens in the Union Budget. He said that the industry now needs a budget which can create jobs, lower interest rates and reduce taxes.

Priyanka Sahay

Moneycontrol Bureau

Jobs sector in the country has been majorly affected till December following demonetisation drive of the Prime Minister Narendra Modi, especially across sectors such as small and medium enterprise and is now on a correction mode, said Hitesh Oberoi, CEO of Info Edge and Naukri.com.


“Post demonetisation, queries on our site fell by 40 percent. Most of our clients were impacted a lot. I think that business is slowly coming back. From -40 percent we are down at -15 percent but we are still not where we were pre-demonetisation,” he said in an interaction with Moneycontrol.com.

As compared to the last year, the overall job index on Naukri saw a decline of 7% during December 2016, according to its monthly report on hiring activity in India. Hirings declined across IT & software, auto, industrial products, oil and gas and construction sectors.

Talking about Budget 2017, Oberoi said that the Budget should look at overall creation of jobs and lead to incentivising middle income earners who plan to buy residential properties.

The finance minister will present the Union Budget on February 1 and it is expected to be one of the most crucial and looked upon budget, especially as it falls after the PM Modi announced a nationwide demonetisation drive to curb black money and boost digital payments in the country.

(Source: Tracxn)

The same led to slowdown across multiple sectors including real estate, consumer durables, and automobile among others.

"2017 will all depend on what happens in the budget. We want a budget which creates jobs, which would lead to lower interest rates, especially for home loans. There should be some incentives for people who are looking to buy a residential property. From a corporate standpoint, we would want a slightly benign tax regime, more than anything else," said Oberoi.

The impact on real estate

The interest rates on loans across different categories have already been witnessing a correction following demonetisation due to growth of deposits in the banks.

Talking about queries on residential properties, Oberoi said a bulk of the demand falls in the sub Rs 1 crore budget across places such as Chennai and Hyderabad and between Rs 1-2 crore across places such as Delhi and Mumbai.

Info Edge which also runs matrimony website Jeevansathi and has invested across multiple firms including food discovery and ordering platform Zomato and insurance comparison firm PolicyBazaar among others, reported 80 percent quarter on quarter growth in net profit for the quarter ending September 2016 at Rs 80.07 crore.

"2016 first half was great for us. Both 99Acres and Naukri did really well. Naukri grew in high teens and even 99Acres growth rates was accelerating and our burn was actually going down. But then we hit a speed breaker," said Oberoi referring to the Prime Minister's demonetisation drive.

"For 99Acres, for the full year, we would have lost money but we were expecting to breakeven in fourth quarter, which is normally our best quarter. That is now going to be delayed by 2-3 quarters, if all goes well," he added.

Real Estate as a sector has been witnessing a slump since the last couple of year. Demonetisation added to that sentiment.

On 'devaluation' of Flipkart & Zomato in 2016

Talking about Zomato, Oberoi said that the company has been doing tremendously well with almost 1.5 million number of orders every month. Last year, brokerage firm HSBC estimated that the billion dollar firm Zomato was overvalued suggesting its valuation at $500 million. The same happened even as the investors of Flipkart kept marking down the valuation of the company throughout 2016.

(Recent Investments by InfoEdge | Source: Tracxn)

"Valuation do not get marked down if an analyst says it needs to get marked down. That is not the markdown. Market price is what our price is," said Oberoi adding that InfoEdge continues to be very bullish on Zomato.

Referring to the valuation markdown faced by Flipkart and a few other companies, he said that private markets are not very transparent. So people need to wait for an event such as when a company gets sold to get a cue of what a company is actually worth.

"The real valuation of many of these companies gets known only when they go public or when they are sold. What you otherwise get to see is one investor, investing at a valuation but that is just one investor. In their eyes, this is the right valuation. In the eyes of somebody else, the valuation may be different,” he said.

First Published on Jan 24, 2017 03:58 pm