Higher promotion costs, staff expenses to weigh on Info Edge margins

Recruitment solutions could see faster recovery, real estate segment could be a drag

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Given the near term pressure on revenues as well as margins investors should await a steady recovery billings before considering the stock

Info Edge (India) reported muted operational performance in the September quarter (Q2). The disappointment was on the margin front, given that higher advertising costs — especially on its matrimonial segment (Jeevansathi) — weighed on operating profit. Margins slid by 17 percentage points on a sequential basis to 20.1 per cent, as advertising expenses nearly doubled. Advertising and sales promotion (A&P) costs stood at 20 per cent of sales, compared to 9 per cent in the June quarter. The management expects the current levels of investment in advertising to ...