ICICI Direct recommended hold rating on Info Edge (India) with a target price of Rs 3000 in its research report dated February 13, 2020.
ICICI Direct's research report on Info Edge (India)
InfoEdge reported a mixed set of Q3FY20 numbers. While revenues were below our estimates, cost optimisation and improvement in Naukri EBITDA led margin to come in above our estimate. Revenues grew 14% YoY to Rs 320.5 crore (below our estimate of Rs 329.5 crore). Recruitment solutions grew 13.1% YoY to Rs 230.3 crore, 99 acres grew 15.3% YoY to Rs 58.2 crore and other verticals grew 19% YoY to Rs 32.1 crore. EBITDA margins expanded ~170 bps QoQ to 33% (above our estimate of 32.4%) mainly due to strict cost controls. Although the current stock price limits the valuation upside, we like the company’s business model considering it is a quasi-play on India’s booming startup economy and prudent capital allocation.
Hence, we maintain our HOLD rating on the stock and value the stock on an SOTP basis to arrive at a target price of Rs 3000.
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