Macro headwinds likely to keep a cautious tab on Info Edge stock

Info Edge (India) posted revenue growth of 15.3 per cent year-on-year (Y-o-Y) in the April-June quarter (Q1) of FY26, with Naukri revenue growth of 14.8 per cent Y-o-Y, 99acres revenue growth of 12.0 per cent Y-o-Y, and 22.7 per cent Y-o-Y growth in other segments. Naukri’s billings growth of 9.0 per cent Y-o-Y was weak on account of the slowdown in IT hiring and deferral of contract closures. Naukri’s profit before tax (PBT) margin declined by 150 bps Y-o-Y due to higher marketing expenses. The advertisement expenses were at 15.1 per cent of revenue vs. 13.4 per cent in Q1FY25. 

Weak billings go hand in hand with weaker margins, leading to downgrades. Revenues of other verticals grew 22.7 per cent Y-o-Y (20.1 per cent quarter-on-quarter (Q-o-Q)) and were 10.2 per cent ahead of estimates. Total billings grew 11.2 per cent Y-o-Y to Rs 640 crore. The EBITDA margin came in at 37.7 per cent (flat Q-o-Q and down 130 bps Y-o-Y), lower than consensus. Adjusted PAT came in at Rs 260 crore, also lower than expected. Revenue and EBITDA grew 15.3 per cent and 11.4 per cent Y-o-Y, respectively. 

Management says a large part of the current marketing spends is for brand building, which may be cut sharply if needed. Naukri’s Q1FY26 growth was driven by an 8 per cent growth in tech, IT services, BPM, and others combined, 17 per cent growth in GCCs, 7 per cent growth in other sectors, and 6 per cent growth in the recruitment consultant segment. Key non-ITES sectors such as technology, retail, healthcare, and manufacturing grew at a double-digit rate. IIMJobs, Naukri Gulf, and Naukri Fast Forward also saw billings growth of 41 per cent, 18 per cent, and 15 per cent Y-o-Y, respectively. 

 

The revenue growth of 12.0 per cent in the 99acres business was decent, with billings growth of 16.7 per cent Y-o-Y. Billing growth was driven by improvements in the number of billed customers and average billing per customer. The company witnessed faster growth in broker and channel partner billings compared with developer billings. PBT loss from the segment increased sequentially in Q1. Jeevansathi recorded revenue growth of 29 per cent Y-o-Y and billings growth of 36 per cent Y-o-Y. Shiksha recorded revenue growth of 19 per cent Y-o-Y and billings growth of 7.8 per cent Y-o-Y.

 

The slower revenue growth in the Naukri business may lead to downgrades since it comes with lower margins for Naukri and higher losses for 99acres. Holdings in Zomato and PB Fintech will, however, add to the fair value of the company. There is room for optimism since GCCs and non-tech sectors such as retail, healthcare, and manufacturing saw double-digit growth, and IIMJobs, Naukri Gulf, and Naukri Fast Forward remain strong performers.

 

99acres sustained market share gains even in a seasonally softer quarter, driven by customer and pricing growth, with brokers and channel partners outpacing developers. The business achieved operating breakeven and generated positive cash flow, and may be headed for decent profitability. Jeevansathi also continued to outperform with 36 per cent billings growth and breakeven profitability. The freemium model, coupled with AI-led product upgrades, is driving stronger user engagement and healthier monetisation. Marketing expenses are steady at Rs 12-15 crore per quarter.

 

Margin expansion may be limited in the near term, as investments are likely to continue. A bounce in recruitment demand is critical. Valuations may already bake in that possibility. Management remains cautiously optimistic about sustaining growth, subject to macro stability and a rebound in hiring demand.

 

After seeing some fall initially, the stock has recovered back to Rs 1,366 levels.