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Hold Info Edge (India); target of Rs 3000: ICICI Direct

February 18
17:25 2020

 ICICI Direct’s research report on Info Edge (India)

InfoEdge reported a mixed set of Q3FY20 numbers. While revenues were below our estimates, cost optimisation and improvement in Naukri EBITDA led margin to come in above our estimate. Revenues grew 14% YoY to Rs 320.5 crore (below our estimate of Rs 329.5 crore). Recruitment solutions grew 13.1% YoY to Rs 230.3 crore, 99 acres grew 15.3% YoY to Rs 58.2 crore and other verticals grew 19% YoY to Rs 32.1 crore. EBITDA margins expanded ~170 bps QoQ to 33% (above our estimate of 32.4%) mainly due to strict cost controls. Although the current stock price limits the valuation upside, we like the company’s business model considering it is a quasi-play on India’s booming startup economy and prudent capital allocation.

Outlook

Hence, we maintain our HOLD rating on the stock and value the stock on an SOTP basis to arrive at a target price of Rs 3000.

For all recommendations report, click here

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