Info Edge (India) Ltd.
India Summit: Management
Meeting Takeaways
Quick Comment: Management indicated that its
internal targets would be lower than actual performance
last year and it needs to wait and watch 1Q trends to get
better picture of fiscal 2013 revenue outlook.
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Management maintains its cautious outlook on the
recruitment business and indicated that the outlook for
collections in Naukri remains uncertain. 4Q revenue
growth was a positive surprise and could have been
driven by market share gains. Management expects 99
Acres revenues to keep growing even in the current
uncertain environment, due to low penetration.
Stable margin outlook if revenue growth momentum
continues: Management believes that margins could
remain stable if revenues grow by 20%+ yoy in FY13e.
Info Edge has so far invested Rs1.32bn and owns
between 38% and 48% of its various investee
companies. It is seeking co-investors in few of its
investee companies.
Our view: Despite the weak macro, we believe
recruitment revenues should be able to grow ~20% yoy
with stable margins in FY13e. Overall, we forecast
consolidated revenue growth of ~22% yoy with EBIT
margins of 28% (+80bps yoy) and net income growth of
11% yoy in FY13e due to our assumption of lower
non-op income and lower gains from associates
companies.
Maintain EW: The stock is already trading at rich
multiples of 38x FY13e and 36x FY14e EPS for earnings
CAGR of 15% over FY12-14e, which limits any material
upside from the current levels in our view.
Risks: Slower than expected revenue growth in
recruitment or higher / lower than expected losses
contributed by either its other verticals or subsidiaries,
are the key upside/downside risks to our estimates.
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