Motilal Oswal's research report on Info Edge (India)
INFOE delivered a strong revenue growth in 1QFY23, with a standalone revenue growth of 59% YoY (est. 54%) on better than expected performance in 99acres (up 35%). EBITDA margin rose 400bp QoQ to 32.1% (est. 28.3%) due to lower ad spends (300bp impact) in Jeevansathi, where it has initiated a change in its business model to free from paid services. 1QFY23 saw continued momentum in billings (up 62% YoY to INR5.2b), ahead of our estimate, led by Naukri (up 65%). The management indicated continued strength in the Naukri business over the near term, although the demand slowdown in the IT sector remains a key risk, given its 60% contribution to revenue. We expect the Recruitment vertical to maintain its strong revenue growth in FY23 on the back of elevated billing, which should drive a revenue CAGR of 30% over FY22-24.
Outlook
We value its operating entities using the DCF valuation. Our SoTP-based valuation indicates a TP of INR4,060. We maintain our Neutral rating.
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