You are here: Home » Markets » News
Business Standard

Info Edge up 3% after Q1FY21 results; Axis Capital maintains 'ADD'

Axis Capital expects to see the company's gradual recovery from Q3FY21

Topics
Markets | Buzzing stocks | Info Edge (India)

SI Reporter  |  New Delhi 

stocks, stock market, m arket, sensex, growth, revenue, earnings, results, Q2,Q1, Q3, Q4, COMPANY, nse, bse,

Shares of Info Edge gained 3.88 per cent to Rs 3,419.85 on the BSE on Tuesday after the company reported consolidated net profit of Rs 93.66 crore in the June quarter of FY21 (Q1FY21) as compared to loss of Rs 190.91 crore reported in Q1FY20.

Consolidated revenue declined 10.8 per cent year-on-year (YoY) to Rs 285 crore during the quarter. Earnings before interest, tax, depreciation, and ammortisation (Ebitda) stood at Rs 104 crore. The Ebitda margin in Q1FY21 came in at 37.3 per cent.

The company recorded billing of Rs 188.6 crore for the quarter as compared to Rs 336.3 crore in quarter ended June 30, 2019, down by 43.9 per cent.

Commenting on the results, the company's CFO Chintan Thakkar said “We continue to evaluate the unfolding situation of the pandemic. Work from home and business continuity plan is operating satisfactorily. The Billings are down in Q1FY’21 on YoY basis as a result of the nationwide lockdown. However, the immediate impact on the Revenue tends to be lower as we recognize the Revenue over the tenure of the contract.".

Limited is among the leading internet companies in India. It runs leading internet businesses - Naukri.com, Jeevansathi.com, 99acres.com, and Shiksha.com among others.

In a recent report, HSBC valued the company's share in food delivery app Zomato at $1.1 billion. Besides, in a blue-sky scenario, India food delivery could be valued at $30 billion in the long term, implying Info Edge’s share in Zomato at $3.5 billion.

"Among all the potential positive triggers for the IE’s share, Zomato is the most critical. While other companies such as Naukri and Policybazaar are great assets for IE, Zomato can significantly impact it’s valuation in the coming years," the report said. It said this is an increase of $2.4 billion or 45 per cent of Info Edge's market cap. In that scenario, Zomato could be valued at $15 billion.

Analysts at Axis Capital maintain 'ADD' rating on the stock and see recovery from Q3FY21 for the company.

"Q1 billing was hit by Covid-19 which may impact Q2 revenue. However, we expect gradual recovery from Q3 led by pickup in billing, network effect benefit with leadership in recruitment and 99acres, and increasing internet penetration. Investment in start-ups at higher valuation may provide upside. We see runway for growth in recruitment and increase its multiple, as traffic attains pre-Covid level in Q3. Maintain ADD with SoTP-based TP of Rs 3,570 (vs Rs 3,115), as we increase EBITDA and valuation for Zomato/PolicyBazaar," the brokerage said in a result update.

At 10:30 am, the stock was trading 1.23 per cent higher at Rs 3,332.45 as compared to 0.6 per cent gain in the benchmark S&P BSE Sensex.Around 3 lakh shares have changed hands on the NSE and BSE so far

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, September 08 2020. 10:56 IST
RECOMMENDED FOR YOU