MUMBAI: The covid-19 pandemic and the ensuing lockdown exacerbated the growth slowdown at Info Edge (India) Ltd. Revenue during the March quarter grew 10.3% year-on-year, the slowest in two years. The stock was down 2.5% in early deals on Thursday.

Note that the quarter had about two weeks of the lockdown but already had a telling impact on the company’s collections. “For Q4 FY20, pre covid-19 growth was 13%, the lockdown had slowed down the (collections) growth to 0%, leading to a shortfall of collection of 40-44 crore (had the business grew at pre covid-19 growth rate for the whole quarter),” Info Edge said in a statement on its recruitment business Naukri (India).

Recruitment business took a bigger hit in April. Motilal Oswal Financial Services Ltd has pegged a 54% fall in collection in April at the recruitment business.

Similarly, collections at real estate portal were also hit. Comparatively, matrimonial portal saw nominal impact on collections. But then again, recruitment and real estate portals are the major revenue drivers for the company.

Growth had been slowing at the company for a while now. Revenue growth slowed to 14% in the December quarter from 19.5% in July-September, reflecting subdued hiring and challenges in the real estate sector.

With the economy hit and large cities still under restrictions, business at recruitment and real estate portals will likely be be sluggish in the near term. “We believe this trend (in the recruitment business) may not change for the next 2-3 months as businesses freeze hiring and/or retrench employees. It is thus logical that there may be loss of customers as well as pricing pressure for Naukri. Naukri’s job speak index also suggests a significant decline in job postings and queries,” said brokerage firm Kotak Institutional Equities said in a note.

On the positive side, the increasing adaptation of digital services will benefit Info Edge in the long run. Analysts see recovery in the second half of the current fiscal on resumption of the business activities.

The company’s decent cash position and cost rationalisation measures should help it withstand the current slowdown. “We foresee a halt in near-term momentum, led by expectation of billing decline in the recruitment and real estate segments for 1HFY21. However, given the market positioning of its entities, multi-dimensional growth could be expected from the company in the medium-to-long term,” said Motilal Oswal Financial Services.

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