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Continual impressive performance…
Info Edge’s Q4FY11 results were in line with our expectations on the
topline front. The company reported a topline of | 81.9 crore against our
expectation of | 81.0 crore posting a YoY growth of 24.5% YoY. The
EBITDA margin improved 162 bps YoY to 35.2%, primarily due to robust
revenue growth backed by high operating leverage. However, on a QoQ
basis, margins declined due to higher promotional expense. The
company reported PAT of | 26.9 crore aided by capital gain of | 5.2 crore
on sale of investments. Barring this, the adjusted PAT of | 21.7 crore was
in line with our estimate of | 21.4 crore.
Highlights for the quarter
The recruitment business grew 21.1% YoY while other businesses
posted a handsome revenue growth of 45.1% YoY. The portal
99acres.com registered revenue growth of 71% YoY, surprising
positively with EBITDA of | 0.4 crore. Overall EBITDA losses in other
businesses was also lower at | 0.9 crore against | 2.4 crore in
Q4FY10 and | 2.7 crore in Q3FY10.
Jeevansathi posted YoY revenue growth of 11% with EBITDA losses
of | 0.4 crore. The company is aiming to reduce the average cost of
acquiring clients in this segment.
Valuation
The company has reported good results on the back of high recruitment
activity and high operating leverage kicking in. Other verticals have also
shown an improvement in the operating performance. At the CMP of |
715, Info Edge is trading at 37.5x FY12E EPS of | 19.0 and 31.2x FY13E
EPS of | 22.9. We have valued the stock using DCF methodology at | 753.
Our target price discounts FY13E EPS by 32.8x and implies an upside of
5.3%. We maintain our HOLD recommendation on the stock.
Valuation
The company has reported good results on back of high recruitment
activity and high operating leverage kicking in. Other verticals have also
shown an improvement in the operating performance. At the CMP of |
715, the stock is trading at 37.5x FY12E EPS of | 19.0 and 31.2x FY13E
EPS of | 22.9. We have valued the stock using DCF methodology at | 753.
Our target price discounts FY13E EPS by 32.8x and implies an upside of
5.3%. We maintain our HOLD recommendation on the stock.
Exhibit 5: DCF assumptions
| in Crore
WACC 10.8%
Revenue CAGR over FY11E - FY20E 18.8%
PV of Cash Flow Till Terminal Year 1,166.1
Terminal Growth 5.0%
PV of Terminal Value 2,534.0
Total Value of Firm 3,700.1
Less: Current Debt 0.6
Total present value of the Equity (excluding current cash) 3,699.5
Number of Equity Shares outstanding 5.46
Per Share Value (excluding current cash) 677.7
Add Current Cash Per Share 75.0
DCF - Target price (|) 752.7
Source: Company, ICICIdirect.com Research
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