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Info Edge (India) Ltd.

BSE: 532777 Sector: Others
NSE: NAUKRI ISIN Code: INE663F01024
BSE 00:00 | 12 Aug 4431.35 13.65
(0.31%)
OPEN

4420.30

HIGH

4578.95

LOW

4411.00

NSE 00:00 | 12 Aug 4433.25 31.65
(0.72%)
OPEN

4430.00

HIGH

4579.00

LOW

4411.00

OPEN 4420.30
PREVIOUS CLOSE 4417.70
VOLUME 66037
52-Week high 7462.95
52-Week low 3314.00
P/E 109.82
Mkt Cap.(Rs cr) 57,156
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4420.30
CLOSE 4417.70
VOLUME 66037
52-Week high 7462.95
52-Week low 3314.00
P/E 109.82
Mkt Cap.(Rs cr) 57,156
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Info Edge (India) Ltd. (NAUKRI) - Chairman Speech

Company chairman speech

Dear Shareholder

FY2021 was no ordinary year with economic activities across the world coming to avirtual standstill amidst the worst global pandemic seen since the influenza epidemic of1919-21. For most of us the COVID-19 pandemic will be a ‘once in a lifetime' eventthat has had an everlasting impact on the way we lead our lives.

COVID-19 RESPONSE

I take this opportunity to share my deepest condolences with all Info Edge stakeholderswho have lost a family member or a friend or a colleague to this disease. I also extend mywarm gratitude to all healthcare workers and volunteers who worked day and night to savepeople's lives. Their relentless efforts amidst incredibly difficult circumstances wereexemplary.

You might recall in my last years' communication I had shared that we at Info Edgehad prepared adequately to deal with the first wave of COVID-19 that hit India aroundMarch-April 2020. With the full support of our IT HR and Admin teams we seamlessly movedinto a ‘work from home' operating environment protecting most of our employees fromthe pandemic. We recalibrated our business strategies and most of our core businesses wereback to growing strongly in the 2nd Half of FY2021. Infact Q4 FY2021 was the best quarterever for most of our businesses.

The second wave of COVID-19 during April-May 2021 dented the fast recovery but not asmuch as the first wave even though it was in many ways much more brutal. The sheer humansuffering during this phase was significantly higher. About 20% of our employeescontracted COVID-19 in this period. More than half had at least one close family memberwho was impacted. As an organisation we stepped up our efforts to attend to thewell-being of all our stakeholders — employees partners and society at large.

A helpline was set up to provide information and timely support to our employees andtheir loved ones. At Info Edge we saw the need for oxygen concentrators and we attemptedto make the supply available for all employees their families extended families some ofour group companies as well as employees of investee companies. It was especiallyimportant to get quick supply of resources like basic to advanced medicines oxygensupport ambulance hospital beds healthcare services at home and other healthcare needs.Conscious efforts were made and a team was deployed to give verified information topeople. Since a lot of our employees were working from home they had gone back to theirhometowns in UP Bihar MP Jharkhand etc. Getting help to them in these places was noteasy but we managed in quite a few cases.

Unfortunately despite our sincerest efforts it is with deep regret that I convey thatwe lost four young employees to covid. Such was the brutal impact of the second wave ofCOVID-19.

Once the emergency was over the Company shifted gears to focus on the vaccinationprogramme for employees and their families which was further extended to some clientsespecially in 99acres. In the initial phase the cities covered included Noida GurugramMumbai Bangalore Hyderabad Chennai and Pune. As we go to print so far the company hashelped conduct about 2800 vaccinations of this about 1100 to employees their familymembers and support staff and about 1700 to clients. This drive is being extended furtherso as to reach out to more employees and customers. Though I am fairly confident that thecountry will bounce back from this deadly pandemic I hope that as a nation we gear up andtake all possible measures to prevent another wave of this deadly disease.

INFO EDGE'S BUSINESSES

Moving on to developments in InfoEdge's businesses in FY2021 there has certainly beena short-term negative impact. From a long-term perspective however there are some clearpositives. Long term growth in all our businesses is related to the pace of adoption ofthe ‘digital way' of doing things by our customers and users. COVID-19 has catalyseddigital adoption of services and forced a shift in behaviour in many businesses. It hasspurred the adoption of online ordering digital goods and contactless digital payments— resulting in a surge in volumes across online grocery stores small retail outletsonline pharmacies vegetable and fruit vendors recharges bill payments as well as OTT(telecom and media) and EdTech players. In these difficult times the digital ecosystembuilt up over the years has proven crucial in fulfilling business transactionspeer-to-peer transfers as well as government direct benefit transfers.

Simply put COVID-19 has provided a major fillip to digitisation of processes acrossthe value chain fundamentally redefining the overall business landscape. Customerbehaviour and preferred interactions are dramatically changing. It is not only aboutdigitising. This shift also requires revisiting the entire value chain which comprises notjust the customer's journey but also other participants especially merchants. Acollaborative ecosystem of stakeholders committed to digital transformation is set to bethe game changer and Info Edge's businesses form intrinsic parts of this digital valuechain.

In this business environment we continue to focus on long term investments across allour platforms — enhancing our product offerings building brand equity adopting anddeveloping new technologies and enhancing the overall skill set of our people to adapt tothe rapidly transforming eco-system. Across our businesses we are stressing on usingenhanced audio-visual tools to create greater customer connect deploying various Machinelearning algorithms to improve the user experience at different touchpoints and usingbusiness analytics to create more relevant offerings for different user segments. Theoverall goal is to further extend our market reach to bring in new customers and provideour existing customers more customised value- added services to create even longer-termengagements.

The financial performance of our business was adversely affected by the lockdown in H1of FY2021. Yet given the difficulties revenues and profits generated by the Company forFY2021 are very creditable. Even under very difficult market conditions standalonerevenue reduced by 13.68% to '10985.97 million in FY2021 while operating EBITDA reducedby 31.1% to '2774.96 million. By Q4 things had bounced back strongly though and wegenerated record cash profits.

The reduction in profitability is largely on account of the fact that even as revenuedeclined we continued with all our endeavours to improve the long-term competitivepositioning of the Company. Consequently while some short-term cost management measureswere implemented long-term investments in people and technology continued unabatedresulting in fixed costs remaining high despite lower revenues.

The company has however been on a strong revival path in the second half of FY2021.Deferred sales revenues were at '5207.86 million as on March 31 2021 against '4655.94million on March 31 2020 — representing an annual growth of 11.85%. The second waveof COVID-19 did not have a severe impact on our business and we expect to bounce backstrongly in FY 2022.

I would like to take this opportunity to thank Institutional investors for continuingto repose faith in our business even in this difficult market environment. We successfullyraised '18750 million from a QIP issue in August 2020. We propose to utilise the netproceeds to meet the funding requirements of our operating businesses and for generalcorporate purposes including acquisitions as a part of our medium term growth strategy.With this the Company's cash balance as on March 31 2021 was about '35600 millionversus '14400 million as on March 31 2020.

CORE BUSINESSES

In terms of our core businesses recruitment solutions had a strong Q4 FY2021 with a22.05% YoY growth in billings. After a sharp fall in the first half we witnessed seculargrowth in the second half with an increase in billings platform usage and the number ofcustomers. Predominantly the revival was led by hiring demand picking up in the IT and ITenabled services sector even as some traditional sectors continue to be under stress.Recruiter engagement with the platform improved further in Q4 again largely led by demandfor IT and Digital professionals picking up. We refocussed our marketing activities onbuilding the Naukri brand amongst relevant audiences using insightful trends and analyticsand maintained our market share of 80% plus in the country's traditional online classifiedrecruitment business despite cutting marketing costs. As the hiring market picks up theemphasis in Naukri will shift to better monetisation of its large traffic leadership anddatabase. To implement this we are not only deploying advanced technological tools butalso working on creating differentiated product offerings for our larger customers. Theacquisition of recruitment portals like iimjobs acquired last year specifically orientedto premium management jobs and hirist a specialised platform for premium IT hiring willalso help us get a higher share of the recruitment spend wallet from our larger customers.

In June 2021 we completed the 100% acquisition of Bengaluru-based Zwayam DigitalPrivate Limited (Zwayam) which is engaged in the business of providing SAS basedend-to-end recruitment shortlisting and screening solutions to clients. Zwayam revenue forFY2021 was about '64.60 million. This acquisition will help us further broadbase ourrecruitment offerings to HR Managers.

In July 2021 we completed another 100% acquisition of Bengaluru- based Axilly LabsPrivate Limited (Doselect). DoSelect is engaged in the business of providing technicalassessment services to its clients for recruitment and learning purposes. It deliversthese services via its technical assessment platform ‘doselect.com'. This acquisitionwould help the Company to offer a new variety of services under its flagship brandNaukri.com. DoSelect revenue for FY2021 stood at about '42.30 million.

Amongst all our businesses 99acres was the worst hit by the lockdown in Q1 FY2021 andagain by the second wave of COVID-19 in CY2021.

While house search and research has moved mostly online for most people buying a houseis a big decision and they would rather wait than buy a house without physically seeingit. At 99acres billing was down by 13.62% to '1848.14 million for FY2021; while revenuedeclined by 23.77% to 1737.78 million in FY2021. However we continued to investaggressively in areas like data quality technology and product development. Consequentlythe business slipped back into operational losses in FY2021 after hitting operationalprofit in FY2020. A new marketing campaign was launched for the brand in FY2021. This wasessential to further strengthen the brand's market leadership positioning in anenvironment where competitors continued to make healthy investments in market developmentactivities.

Given the consolidation the real estate industry has seen over the years werestructured the sales and servicing team to focus more on our bigger customers. The99acres business bounced back very strongly in H2 FY2021 and both traffic and revenuenumbers hit an all-time high in Q4. Going forward we expect the share of onlineadvertising in the overall spend for real estate advertisers to increase. The marketbehavioural shift post COVID-19 has already given strong indications of growth of digitalat the cost of print media in this segment. So while in the short term both businessgrowth and profitability have been adversely hit by covid we expect the housing market tocome back strongly in the quarters to come aided by tow home loan rates higher digitaladoption and higher demand for bigger homes post covid.

The matrimony business under jeevansathi.com was the least affected by the prevailingeconomic environment. Billing for the business grew by 15.23% to '1003.76 million inFY2021 while revenues increased by 14.39% to '968.96 million in FY2021. As highlighted inlast year's Annual Report we are continuing to invest in this business with a revisedbusiness strategy. Consequently even with revenue growth the business incurs operatinglosses but much of this is by design.

The key differentiating features on the jeevansathi platform like online verificationvideo-calling and video based online meet-ups helped drive user engagement and the apprating on the Google Play Store continued to be one of the best in the category.Jeevansathi continues to strengthen its position in the Hindi Belt.

In Shiksha we continue to focus on enhancing the quality of engagement with our usersand developing more relevant user content. Even though colleges and universities were shutfor the better part of the year billing increased by 12.66% to '586.39 million in FY2021and revenues grew by 6.93% to '569.61 million in FY2021. Importantly the businessgenerated an operating EBITDA profit of '40.97 million in FY2021.

Amongst our investee companies as I write Zomato has got listed. The IPO wasoversubscribed 38 times making it a very successful public offer. I am glad that themarket led by institutional investors understood and has appreciated the intrinsic valueof this business and I continue to wish the team well for the future. Another investeecompany - PB Fintech Ltd. (PolicyBazaar) has also filed a DRHP with SEBI.

We also continue to pursue activities that give back to society. Our CSR initiativesmostly related to education and some related to COVID-19 relief continue.

The last few months have been humbling and a great learning experience in many ways. Onthe one hand the human being in me has a very dark story to paint for the year gone by.This kind of widespread danger to life has been unparalleled and my sincere hope is thatthe worst is behind us. On the other hand the entrepreneur in me applauds the resilienceshown by our employees and our businesses during this turmoil. This phase has alsoaccelerated the process of digitisation in the economy and provided much faster scope forgrowth across our businesses.

So amidst a pall of gloom I see a rainbow of hope going forward. And like someonesaid ‘Once you choose Hope anything's possible.' I take this opportunity to onceagain thank all the medical staff and volunteers who have worked very hard across theworld to battle COVID-19 and offer my hearty appreciation to all our employeescustomers investors and other stakeholders for continuing to support the Company in thesetough times.

Regards

Hitesh Oberoi

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