Info Edge (India) - Q1FY21 Result Update - ICICI Securities

InfoEdge's Q1FY21 numbers were above our estimates. Revenues declined 10.4% YoY to Rs. 280.1 crore (above our estimate of Rs. 221.1 crore). Recruitment solutions declined 8.8% YoY to Rs. 200.2 crore (vs. our estimate of Rs. 142.7 crore) and 99acres declined 24.7% YoY to Rs. 42.5 crore (vs. our estimate of Rs. 36.7 crore). However, other verticals grew 1.7% YoY to Rs. 37.5 crore (vs. our estimate of Rs. 41.7 crore). EBITDA margins increased ~504 bps QoQ to 37.3% (above our estimate of 14.5%) mainly led by lower advertising (down 841 bps YoY) and other expenses (down 156 bps YoY).

Valuation & Outlook

We like the company due to its prudent capital allocation, a quasi-play on the Indian start up ecosystem and leadership in recruitment with EBITDA margin of above 50%. In addition, Info Edge already has two unicorns in the growing space (Zomato & PolicyBazaar) while its investment in the tech start up space makes it an attractive company. However, a run up in stock price leaves no room for upside in valuation. 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. 3555.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_InfoEdge_Q1FY21.pdf

Shares of INFO EDGE (INDIA) LTD. was last trading in BSE at Rs.3313.75 as compared to the previous close of Rs. 3291.9. The total number of shares traded during the day was 21930 in over 2941 trades.

The stock hit an intraday high of Rs. 3433 and intraday low of 3291.9. The net turnover during the day was Rs. 73723913.

Source : Equity Bulls

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