India Internet :4QFY15F preview: Nomura Research

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Key things to watch: Company-specific

Justdial (JUST IN, Buy, TP: INR1,930)

 We expect paid listing growth of 6% q-q along with stable realization

trends.

 From a margin perspective, we expect a slight decline in EBIT margins in

4QF on a q-q basis on higher employee-related expenditure.

 We expect revenue growth of ~32% y-y and PAT growth of 17% y-y.

 Key to watch would be: 1) whether the commercial launch of Search Plus

is on schedule in 1QFY16F as indicated by management, 2) new tie-ups

and traction across Search Plus services, and 3) investments in the

Search Plus business and the likely margin impact.


Info Edge (INFOE IN, Buy, TP: INR945)

 We expect a 19% y-y growth in the Naukri (job classified) business.

 Due to intense competitive activity in the real estate classified space and

overall sluggishness in the real estate market, we expect Info Edge’s

online real estate classified revenue growth to further decelerate to 14%

y-y in 4QF (vs. 21% y-y range in 3Q). We expect EBITDA losses in the

99acres business to remain elevated at levels similar to 3Q (INR144mn),

as the company plays catch up on features and higher promotional

expenses.

 An update on: 1) competitive intensity and the magnitude of advertising

spends likely in the real estate business, 2) whether INFOE will participate

in the next fund-raising at Zomato, and 3) the growth outlook in the Naukri

business will be keenly watched.

 Overall, we look for a revenue growth of 19% y-y, EBIT margins of 22.6%

(down 480bps y-y) and EPS growth of 4.6% y-y.