Info Edge share price recovers: Should you buy, sell or hold post Q3 result

At the time of writing this copy, the stock had recovered and started trading in the green, up ₹16, or 0.46%, at ₹3,480.30.

The company announced its third quarter results last week with revenue growth of 4.4% QoQ and a better margin in the core segment. The company slipped into losses in the December quarter (Q3FY23) owing to recognition of impairment charge of Rs276 crore on investment in 4B Networks. EBITDA margin improved about 450 bps QoQ to 39.1%.

Hitesh Oberoi, Managing Director and Chief Executive Officer said – “While we are seeing a slowdown in the IT hiring, the Non IT hiring market continues to be strong.”

The company’s key investments include 14% stake in Zomato Ltd and nearly 13% stake in PB Fintech Ltd.

Here is what brokerages suggest investors to do with the stock:

HDFC Securities

Recommednation: Buy | Target: ₹4,600

We expect growth to be led by Naukri, 99 acres and Shiksha. The margin for recruitment will be in the range of 60-61%. We maintain our Buy rating with a SoTP-based TP of ₹4,600, valuing Naukri at 40x EV/EBITDA, 99acres/Jeevansathi/Shiksha at 5/3/3x P/S, while Zomato and Policybazaar have been assigned the market value (~15% discount). The core recruitment business trades at 30x FY24E EV/EBITDA.

ICICI Direct

Recommendation: Hold

Info Edge provides internet-based service delivery like recruitment services (Naukri), real estate (99 acres), Jeevansathi and Shiksha. It is a quasi play on Indian startups like Zomato, PolicyBazaar, Shoekonect, Ustra, Gramophone and job market, matrimony services and real estate market.

“Info Edge’s share price has grown by ~2.9x over the past five years (from ₹ 1,173 in February 2018 to ₹3,390 in February 2023). We value Info Edge at ₹3,265 on SOTP basis,” said the brokerage in a report.

(This is a developing story. More to come)