Cautious near-term outlook to weigh on Info Edge amid weak IT hiring

The company's billings in Q3 for the Naukri or recruitment segment were up 11 per cent year-on-year but were lower than Street expectations

Weakness in the information technology (IT) sector hiring has weighed on Info Edge (India) over the past year, leading to a 13 per cent correction in the stock during this period. While the company’s 2025-26 (FY26) third-quarter (October–December/Q3) performance showed a marginal improvement, brokerages believe the IT hiring outlook remains weak due to macroeconomic uncertainty in the US.

 

Info Edge’s Q3 billings for Naukri, its recruitment segment, rose 11 per cent year-on-year (Y-o-Y), but fell short of Street expectations. This was only slightly better than the 10.8 per cent Y-o-Y growth seen in the second quarter (July–September/Q2).

 

After Q2 results, the company had said that the general hiring environment remained challenging, with global capability centres being the only bright spot. Realisations in the segment may remain under pressure as Naukri adds more customers from Tier-II and Tier-III cities. Naukri’s profit before tax (PBT) margin declined by 191 basis points (bps) Y-o-Y due to higher marketing expenses, although it improved sequentially.

 

Analysts Abhishek Bhandari and Karan Nain of Nomura Research say ongoing macroeconomic uncertainty in the US is affecting decision-making in the IT segment. Domestic business also remains weak, they add.

 

Nomura maintains a ‘buy’ rating with a target price of ₹1,585. Downside risks include a slow recovery in the recruitment classified vertical and disappointing performance of listed investments, the brokerage says.

 

Among other segments, real estate platform 99acres saw billings growth of 14.4 per cent, which was healthy but below estimates by about 300 bps. The segment had posted revenue growth of 12.8 per cent in Q2, while billings growth was 14 per cent Y-o-Y. The company saw faster growth in broker and channel partner billings compared with developer billings. PBT loss from the segment increased sequentially in Q2, with the company indicating that operating profit breakeven would take time.

 

The education (Shiksha) and matrimony (Jeevansathi) verticals grew around 13.7 per cent, also below Street expectations. As a result, the overall billings growth of 11.8 per cent missed the expected figure of over 13 per cent.

 

JM Financial has maintained an ‘add’ rating, with a revised December 2026 target price of ₹1,430 (unchanged from the previous target). The revision reflects a sharp correction in the stock prices of investee companies (Eternal, PB Fintech), valued at an unchanged holding company discount of 25 per cent to their respective current market prices.

 

After Q2 results, Kotak Research cut FY26 through 2027-28 revenue estimates primarily due to slower Naukri revenue growth, forecast at 6.7 per cent over the period. The brokerage also assumed weaker margins for Naukri and higher losses for 99acres, resulting in a 2–3 per cent cut in earnings per share. For investee companies, Kotak has a target price of ₹400 per share for Eternal and ₹1,600 for PB Fintech, leading to an unchanged sum-of-the-parts fair value of ₹1,455.