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One quick thing: The court battle between Google and Indian tech startups on app billing policy restarts in Madras HC.

In today’s newsletter:

• Info Edge feels the IT chills
• Nykaa loses sheen
• HCLTech seeing highest ever deal pipeline: CFO

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When the IT sector sneezes, Info Edge catches a cold.

Info Edge's revenue rose 15% to Rs 626 crore in the June quarter, but its net profit fell 50% to Rs 147 crore. This was due to a flat billings growth of its recruitment platform, Naukri.

• Naukri was impacted during the quarter due to a slowdown in IT hiring. 50% of the company's recruitment business is indexed to IT hiring

• Billings for the June quarter dropped marginally by 0.2% year-on-year to Rs 523 crore

Oberoi, however, expressed confidence in the growth of captives, which are on a quiet march and already employ 16 lakh people in the country. He added that while there is movement, hiring by captives is a fraction of total IT hiring.

In the concall, Info Edge founder Sanjeev Bikhchandani acknowledged that investing in Rahul Yadav-founded realty startup 4B Networks was a mistake.

"Investors do go wrong... 4B was a mistake. I think we have to admit it. You can't write off Rs 288 crore saying it wasn't a mistake. It was a mistake," he said.

This comes after Info Edge, the Zomato and Policybazaar backer, initiated a forensic audit of 4B Networks for not allowing the investor access to its financials and other business information.The two go into arbitration on August 14.

• Bikchandani also said that valuations and round sizes have come down in the startup ecosystem, making it a good time to make fresh bets on young companies

While most customers are used to seeing Nykaa send a price drop notification on the app, today the company sent a different kind of alert.

Nykaa reported a 27% YoY decline in profits to Rs 3.3 crore in Q1FY24

• This is a significant drop from the Rs 4.6 crore profit it registered in the same quarter last year
   
• The decline in profit is largely due to a dip in demand
  
  
• Revenues, however, increased by 24% YoY to Rs 1,421.8 crore from Rs 1,148.4 crore 

• However, on a net profit level, the company reported a net profit of Rs 5.4 crore in the June quarter, an 8% increase YoY

• GMV up 24% YoY to Rs 2,667.8 crore in Q1FY24
  
  
• EBITDA margin at 5.2% in June quarter vs 4.0% from a year ago
  
  
• Nykaa's offline footprint also increased to 152 stores, about 43% higher from the previous year

Nykaa Fashion is hoping to dress up their sales figures, but it seems like people aren't buying clothes as much as they would like them to.

“Nykaa Fashion’s growth in the quarter was much ahead than the industry growth but below its long-term trajectory," CEO Falguni Nayar said.

Find out more

After a tepid first quarter performance, HCLTech CFO Prateek Aggarwal said that the IT services major is currently seeing its all-time highest deal pipeline, driven by the large and long-term deals won over the past six months.

One of the most notable deals that HCLTech has won is a six-year contract worth $2.1 billion from telecom giant Verizon Business. 

• This is HCLTech's single largest services deal to date

HCLTech said in regulatory filings that the partnership between the two companies will start showing a positive revenue impact from November 2023.

• A select group of Verizon Business staff will also transition to HCLTech to execute the collaboration

During its Q1 earnings call, HCLTech mentioned that it had over 140 external and internal generative AI projects at various stages of maturity, from proof of concepts to implementation.

• Anil Ganjoo, chief growth officer for Americas, TMT, and RCPG Industries at HCLTech, said that the Verizon deal will be a key example of AI projects generating revenue.

Go deeper

The GST Council's 28% tax on real-money games received the parliament nod today, but it has already caused quite a stir in the skill-based gaming industry.

We delved into the key differences between the proposed GST levy and the current regime for the nascent yet fast-growing industry, and who may be most impacted. 

Read our explainer

• Hackers are finding new ways to exploit vulnerabilities in AI systems, such as ChatGPT, by using prompt injection attacks.
  
  
• Spotify has announced the it's expanding the availability of its AI-based DJ feature to more countries around the world.

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