$NAUKRI ’s AI Gamble

$NAUKRI ’s reputation as a savvy investor rests heavily on its early bets in Eternal (formerly Zomato) and PB Fintech. These consumer‑tech winners have delivered a gross IRR of ~34%, turning ₹2,755 crore invested across 45 companies into a valuation exceeding ₹37,000 crore. Overall, its ₹4,900 crore deployed in 135 startups is now valued at ~₹41,300 crore, translating into a gross IRR of 33%. Shift Toward AI & Deeptech: Management sees the next growth wave in AI and deeptech. Since 2020, it has invested ₹614 crore in 28 AI startups and ₹455 crore in 30 deeptech ventures. These portfolios are valued at ₹1,268 crore and ₹559 crore, respectively, with IRRs of 31% and 15%. The focus spans enterprise AI, robotics, semiconductors, spacetech, biotech, and electric mobility, with some already attracting marquee investors and government support. Patient Capital Advantage: Unlike traditional VC funds, Info Edge benefits from patient capital, funding investments largely through operating cash flows rather than raising external funds. This allows it to back founders early and stay invested longer, positioning itself as a hybrid between a corporate investor and a VC firm. Cash‑Flow Challenges: Despite strong paper gains, cash generation remains concentrated in Naukri (74% of FY26 revenue). Other verticals—99acres, Aisle, Shiksha, and Jeevansathi—face profitability or cash‑flow constraints. The standalone entity closed FY26 with just ₹130 crore in cash, raising concerns about sustaining investments until exits or IPOs materialize. Investor Conundrum: Eternal and PB Fintech were once‑in‑a‑generation successes. Whether Info Edge can replicate such outcomes in AI and deeptech remains uncertain, given early‑stage mortality risks and subdued recruitment demand. The stock, down 33% in a year yet trading at 50x FY27 earnings, reflects investor skepticism about whether paper gains will convert into real profits.