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Info Edge (India) topped expectations in its October-December quarter (Q3) results, posting strong revenue and profit growth.
Its shares have rallied as much as 6.14 per cent in two days.
The technology holding company’s revenue rose 15.2 per cent year-on-year (Y-o-Y) to Rs 722.3 crore, driven by robust performance across its key verticals, particularly its recruitment business.
Info Edge’s consolidated profit surged 60.6 per cent Y-o-Y to Rs 242.5 crore, while operating profit climbed 34 per cent annually to Rs 271.5 crore.
The operating profit margin also expanded by 530 basis points Y-o-Y to 37.6 per cent.
Despite mixed reactions from some analysts, brokerages are generally optimistic about Info Edge’s prospects.
The company’s continued strength in recruitment billings, especially in the information technology (IT) and non-IT sectors, has driven growth, with double-digit expansion in recruitment billings for two consecutive quarters, analysts said.
Moreover, the strong performance has led several brokerages to maintain a positive outlook, though target prices vary.
Analysts at Nuvama have a bullish view on Info Edge, raising their target price to Rs 9,100 from Rs 8,800, citing strong growth across the business and improved margins.
The brokerage highlighted that the company’s performance in recruitment, particularly in the IT and non-IT segments, is on a clear upward trajectory, and the recent Q3 results reaffirm the solid foundation of the business.
Despite only tweaking its 2024-25/2025-26/2026-27 earnings per share estimates by less than 2 per cent, Nuvama retained its ‘buy’ rating, reflecting confidence in Info Edge’s ongoing expansion and operational efficiency.
Bernstein also remained positive on Info Edge, maintaining an ‘outperform’ rating with a target price of Rs 8,690.
The brokerage attributed the solid Q3 performance to the steady recovery in the recruitment business, with growth in both IT and non-IT sectors.
A key highlight from Bernstein’s report is the ongoing strength of the flagship employment website Naukri.com, which has benefited from improved market conditions.
Meanwhile, real estate classifieds platform 99acres posted strong revenue growth, though operating losses remain a concern.
Bernstein also noted the company’s announcement of a 1:5 stock split, which could further boost investor interest and reflect positive sentiment around the stock.
Nomura slightly lowered its target price to Rs 8,510 from Rs 8,630.
Despite the strong recruitment recovery, the brokerage revised its target price due to a lower valuation for Info Edge’s investment in Zomato.
Nomura maintained its ‘buy’ rating, noting that recruitment billings were up 15 per cent Y-o-Y and that the improvement in margins signalled operational strength.
However, it highlighted risks related to a slower recruitment recovery and the underperformance of listed investments as potential headwinds.
Nomura’s lower target price reflects these risks, even as the core business continues to show strength.
Macquarie remained the most cautious among brokerages, maintaining an ‘underperform’ rating with a target price of Rs 4,150.
While it acknowledged the recovery in recruitment billings and the strong performance of 99acres, Macquarie raised concerns about higher provisions for investments, which impacted net profit.
The brokerage also noted that despite positive growth in the matrimonial website Jeevansathi.com and educational portal Shiksha.com, these businesses are still grappling with higher operating losses.
Moreover, Macquarie’s target price reflects its more cautious view of Info Edge’s ability to fully capitalise on its growth potential, given the risks surrounding investment provisions and overall profitability.
That said, Info Edge’s Q3 results have left a positive impression on most analysts, with brokerages generally upbeat about the company’s strong recruitment performance and improving margins.
While Nuvama and Bernstein continue to favour the stock with higher target prices, Nomura’s slight downgrade and Macquarie’s cautious stance highlight concerns over investment-related issues and a slower recruitment recovery.
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