Rs 10/Share Dividend: Info Edge Share Target Price Raised, Potential Of 22% Upside Seen

IT stock, Info Edge is in focus as the shares will turn ex-dividend later in the current week. Info Edge has declared an interim dividend of 100% which it expects to pay before month-end, however, to determine eligible shareholders the record date is fixed on November 17. Nuvama has raised its targe price on Info Edge after Q2 results were in-line with estimates.

At the time of writing, on BSE, Info Edge share price traded at Rs 4501.80 apiece, down by Rs 13.70 or 0.30% with market cap of Rs 58,246.14 crore.

As per the regulatory filing, Info Edge declared an interim dividend of 10/- per share (on face value of Rs.10/- per share) for the financial year 2023-24. It added, record date for the purpose of determining the name of the members eligible for receipt of the Interim Dividend will be Friday, November 17, 2023.

Accordingly, the dividend would be paid on or after November 29, 2023

Info Edge recorded 11.5% growth in its Revenue from Operations at Rs. 593 crore on standalone basis for the quarter ended Sept 30, 2023 as compared to Rs. 531.8 crore in the corresponding quarter of previous fiscal. 99acres.com, the real estate vertical of Info Edge continued its growth trend for past few quarters and delivered a strong performance in Q2'24 with revenue growth of 25.2%. The revenues for the quarter in the recruitment business grew 9.1% year on year. Billing of the Company for the quarter grew by 4.8% year on year and stood at Rs. 569 crore.

Also, the company registered a growth of 26.8% in its operating profit which stood at Rs. 218.9 crore on standalone basis for the quarter ended Sept 30, 2023 as compared to a profit of Rs. 172.5 crore in Q2'23.

As per brokerage Nuvama, Info Edge (IEL) reported in-line Q2FY24 revenue, but better-thanexpected margin and profitability. While the slowdown in IT hiring persisted, recruitment billing increased 1.4% YoY aided by double-digit growth in the non-IT segment.

It added, "IEL delivered decent results in a challenging environment. Naukri continues to clock double-digit growth in the non-IT business while the IT business declined further."

Further, the brokerage said, "IEL has demonstrated superior execution despite certain headwinds in the recruitment business. Operating efficiencies and better productivity are improving the overall margin profile of the company. The company continues to make investments in real estate and matrimony; however the combination of revenue growth and reduced spends on advertising have translated to reduced cash burn for the two businesses. Management has no breakeven target for real estate, but highlighted that if the real estate market continues to be buoyant there is a possibility that it might break even."

On the valuation, Nuvama's note said, "We have rolled forward the valuation of each business to the average of FY25E/26E. In our updated SoTP, the value of Naukri (Recruitment) increases to INR2,911/share from INR2,779/share. Increase in market-caps of Zomato and PB Fintech (Policybazaar) since our last report has contributed INR200/share increase in our TP."

Lastly, while raising target price Nuvama's note said, "We contend that the IT business headwind should start to moderate going forward, which would help in propelling growth. All in all, we are revising up FY24E/25E EPS by 2.9%/1%. Retain 'BUY' with a revised SoTP-based TP of INR5,500 (earlier INR5,150)."