Buy This Multibagger Service Sector Stock, Shares Can Surge 20%, Consolidated Revenue Grew 66.5% YoY

Geojit, a leading brokerage firm, has recommended "buy" the stock of Info Edge (India) Ltd., a leading service sector company, which operates various online portals. The brokerage in its report has given a buy call with an estimated target price of Rs 5,131 for the stocks of the company. According to the brokerage firm, the stock is likely to gain 20% if the investors buy the stock at the current market price.

Info Edge (India) Ltd. is engaged in online classified business. It operates an online job portal, Naukri.com; a matrimony website, Jeevansathi.com; a real estate search portal, 99acres.com; and an educational website, Shiksha.com. Company's Q1FY23 consolidated revenue grew 66.5% YoY to Rs. 547cr, driven by broad-based growth across segments.

 Stock Outlook & Returns  

Currently, the stock of Info Edge is trading at Rs 4,305.65 apiece. The 52 week low is Rs 3,313 apiece recorded on 26 May 2022 and the 52 week high is Rs 7,465.40 apiece recorded on 19 October 2021, respectively.

Returns over the past 5 years

Over the week, the shares of the company gained roughly 1.18%. Whereas, in the past 1 month, the shares price value declined 2.88%. In the past 1 year, the share price has slid down by 35.59%. In the past 3 years, the shares surged 131.2%, giving a positive return. In the past 5 years it gave a multibagger return of 332.34%.
 

Topline driven by broad-based growth across segments

Consolidated revenue grew 66.5% YoY and 15.7% QoQ to Rs. 547cr, driven by broad based growth across segments. Recruitment segment grew 73.0% YoY to Rs. 400cr, owing to strong hiring across sectors. 99 acres business grew 34.9% YoY to Rs. 66cr, led by strong momentum in resale, rental, commercial and new home sales across top cities. Other revenue grew 67.6% YoY to Rs. 80cr, aided by strong recovery in abroad education business. Overall billings grew 62.4% YoY to Rs. 524cr, driven by recruitment business (up 64.6% YoY to Rs. 415cr), 99 acres (up 173.0% YoY to Rs. 61cr) and education business (up 30.7% YoY to Rs. 30cr). However, Jeevansathi billings declined 29.8% YoY to Rs. 17cr, due to concessional offerings.

Strong EBITDA growth driven by recruitment business

EBITDA surged 174.6% YoY to Rs. 420cr, while EBITDA margin expanded 30.2% YoY to 76.7% in Q1FY23. Recruitment business reported EBITDA of Rs. 231cr, up 80.2% YoY, driven by strong revenue growth. In 99 acres, EBITDA came in at Rs. 35cr loss, owing to higher advertising and promotion (A&P) spendings. In Jeevansathi business, EBITDA came in at Rs. 28cr loss, as the company devised a new strategy to generate high traction and made its chat feature free. PAT grew 15.7% YoY to Rs. 179cr, despite higher minority interests.

Key concall highlights

• Recruitment business reported strong billing growth in the range of 65.0-75.0% for the fifth consecutive quarter.
• The Naukri business witnessed increased recruiter and job seeker activity. There were 28,365 new job seeker registrations per day in Q1FY23.
• Zwayam and DoSelect billings stood at Rs. 6.25cr and 6.59cr respectively, aided by well-integrated go-to-market (GTM) with Naukri India.
• The management also indicated that A&P spendings are expected to be at elevated levels in 99-acres business in the next few quarters.

Valuation

Commenting on the valuation, Geojit said, "We expect the recruitment vertical to deliver strong performance in future, aided by high attrition, elevated freshers hiring and strong pipeline in the IT sector. Robust demand in home sales across top cities despite an increase in interest rates, a strong revival in students opting to study abroad, high traction in Jeevansathi business augur well for the company's performance in the future. Hence, we reiterate our BUY rating on the stock with a revised target price of Rs. 5,131 based on SOTP valuation."

Disclaimer

The stock has been picked from the brokerage report of Geojit. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.