Naukri Q1 strength fuels Info Edge rally, but sustaining momentum is key

Rally has found its wind, but sustained billings growth will keep it on course

The stock of Info Edge (India) continued to gain on the bourses, rising over 22 per cent in the past week, with most of the gains coming in the last two trading sessions. The stock was among the top gainers on both days in the BSE 100. The latest trigger for the online major is better-than-expected billings for the recruitment segment in the first quarter (April-June/Q1) of 2026-27 (FY27). Following the update, some brokerages have upgraded the stock, and further upside will depend on the outlook for billings across its key verticals. At the current price, the stock is trading at 52x its 2027-28 (FY28) earnings per share estimates.

 

In a pre-results update, the internet-based services company reported standalone billings growth of 14.4 per cent, ahead of brokerage estimates by over 400 basis points. A large part of this outperformance was driven by the recruitment vertical (Naukri), which registered billings growth of 17.5 per cent year-on-year (Y-o-Y). Brokerages had estimated the recruitment segment would report growth of around 10 per cent, in line with the previous three quarters. The company had reported 9.5 per cent growth in the fourth quarter (January-March/Q4) of 2025-26 (FY26), while growth was around 11 per cent in each of the two preceding quarters.

 

The sharp acceleration, according to analysts at JM Financial led by Swapnil Potdukhe, reflects multiple structural growth drivers. Average revenue per user (Arpu) has benefited from pricing actions undertaken alongside the commercial rollout of artificial intelligence (AI)-powered products, in addition to improving hiring activity at the senior and specialised talent end. Weak hiring sentiment across critical sectors such as information technology services is pushing more job seekers to opt for paid services. JM Financial has upgraded the stock to ‘buy’ with a revised target price of ₹1,350. The revision is driven by a 5-12 per cent increase in recruitment segment billings estimates for FY27 through 2028-29 (FY29), which, in turn, raises standalone earnings per share estimates by 7-15 per cent.

 

Naukri’s billings growth (Y-o-Y) in Q1FY27 improved on the trend seen in FY26, particularly in Q4FY26, according to Nomura. Analysts Abhishek Bhandari and Karan Nain believe that premium hiring (jobs requiring niche skills and offering higher pay, especially in technology), along with higher Arpus and a renewed focus on the consumer business through AI-led offerings, including a résumé maker, mock interviews, and jobseeker agents, may have contributed to the strong growth. This is despite possible weakness in the West Asian market due to the ongoing conflict, they added. The brokerage has maintained a ‘buy’ rating with a target price of ₹1,320.

 

Goldman Sachs Research has raised its FY27-FY29 revenue and net profit estimates for Info Edge by 3-4 per cent. It expects revenue to grow 13 per cent and operating profit 30 per cent. The next rerating catalyst for the company could come if it sustains mid-teens billings growth. Goldman Sachs has raised its target price to ₹1,400 from ₹1,330.

 

While Naukri accounts for over three-fourths of revenue and was the standout performer, the other key verticals also reported healthy growth. The real estate segment (99acres) posted billings growth of 16.6 per cent, ahead of expectations. The segment was affected in Q4FY26 by one-off internal changes. The company aims to double 99acres’ business over the next three years and achieve an operating profit margin of 25-30 per cent over the medium term. It also expects the business to turn cash-generative in FY27.

 

The Jeevansathi (matrimony) vertical registered 14 per cent Y-o-Y growth in billings, while Shiksha (education) reported a 22.8 per cent decline as its search function was affected by AI.