IT recovery key for Info Edge as Q2 growth lags on weak hiring trends

Recruitment gains in non-tech, real estate, matrimony cushion impact of weak tech hiring

Hit by a slowdown in information technology (IT) hiring, Info Edge (India)’s results for the July–September quarter (Q2) of 2025-26 (FY26) fell short of brokerage expectations. What helped the online recruitment major offset the weak IT hiring trend was broad-based growth across other sectors.

 

While the company remains cautiously optimistic about a revival in the IT vertical, some brokerages have cut their earnings estimates as well as target prices, citing multiple macro headwinds and limited valuation upside. The stock, currently trading at 65–75x its 2026–27 (FY27) earnings per share (EPS) estimates, has fallen about 11 per cent over the past year. 

In Q2, recruitment billings rose 11 per cent year-on-year (Y-o-Y) but came in below expectations due to sluggish IT demand. IT growth stood at 8 per cent, similar to the first quarter (Q1), but global capability centres stole the spotlight with an 18 per cent rise. The non-tech segment grew 11 per cent, while consulting was up 9 per cent.

 

The company’s real estate vertical, 99acres, recorded 14 per cent Y-o-Y billings growth, with broker and channel partner billings outpacing developer billings. 99acres’ traffic share climbed to 49 per cent, aided by increased marketing spends. Profit before tax was ₹23 crore, compared with ₹14.2 crore in Q2 of 2024-25 (FY25). Growth was driven by higher customer additions and improved realisations per customer. The company continues to spend aggressively on marketing to strengthen its market position. JM Financial expects revenue acceleration in real estate to follow.

 

Analysts at Motilal Oswal, led by Abhishek Pathak, believe the platform’s continued investments in marketing and artificial intelligence-driven matching tools may weigh on near-term profitability but will reinforce its market leadership. The brokerage expects the recent traffic share gains to translate into billings over the next three to four quarters.

 

Billings in its matrimonial vertical, Jeevansathi, grew a robust 29.3 per cent Y-o-Y, driven by better monetisation of customers. The segment’s margin improved to 1.5 per cent from minus 2.5 per cent and 0.3 per cent in Q2FY25 and Q1FY26, respectively.

 

Nomura believes the decision to make profile listings free has worked well for the matrimony platform, boosting traffic and engagement while lowering marketing costs. While the brokerage has marginally cut its earnings forecast and reduced its target price to ₹1,585, it has maintained a ‘buy’ rating on the stock.

 

JM Financial has trimmed its standalone FY26 through 2027-28 (FY28) EPS estimates by 3–4 per cent, expecting slower margin expansion in recruitment and 99acres. It has maintained an ‘add’ rating with a revised target price of ₹1,450.

 

The standalone business valuations of 42x/37x for FY27/FY28, respectively, remain within its comfort zone. Analysts led by Swapnil Potdukhe note: “Given that Info Edge has historically commanded much higher multiples, meaningful upside will depend on some stability in macros.”

 

Motilal Oswal has a ‘neutral’ rating on the stock with a target price of ₹1,300. The brokerage expects near-term recruitment growth to remain rangebound, as macro uncertainty and client caution — particularly in IT and consulting — continue to mute hiring demand.

 

For its other verticals, 99acres and Jeevansathi, the brokerage believes the management’s disciplined investments are showing progress, and these businesses could scale up meaningfully over the medium term, adding to the group’s long-term value. However, current valuations already reflect much of the expected growth, leaving limited room for rerating.