ICICI Securities is bearish on Info Edge India has recommended sell rating on the stock with a target price of Rs 2135 in its research report dated June 04, 2020.
ICICI Securities research report on Info Edge India
Infoedge provided an update on the impact of Covid-19 on its financials. April revenue of Rs904mn on a run rate basis (quarterly) already suggests a sequential revenue decline of 16% QoQ (-13% YoY) in Q1FY21 with actual numbers likely to be worse given that April billings were only 37% of Q4 average with meaningful improvement in May also unlikely. Billings declined by 6% and 24% YoY for Naukri (India) and 99acres in Q4FY20 with collections in the month of April being just 38%, 6% and 33% in Naukri (India), 99acres and Shiksha of their respective Q4 averages. We expect recruitment billings to stabilise YoY in Q3FY21 and return to normalised growth by Q4. 99acres will likely take time to recover given that builders represent 42% of revenues with a reliance on primary sales even higher at 65%.
We expect overall revenues to decline by 9% in FY21. Flexibility to cut costs is limited given fixed costs of Rs6bn in FY20 and need to continue advertising spends in Jeevansathi where competitive intensity continues to remain elevated amidst a more defensive profile of revenues. Maintain SELL with a target price of Rs2135.
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