NAUKRI

’s Valuation Stretched Amid Sector Headwinds

.’s shares have fallen ~15% in the past month, mirroring the Nifty IT index decline, as investors worry about AI-led disruption to recruitment revenues. In Q3FY26, the company reported 14% revenue growth to ₹765 crore, with ***** (recruitment) delivering 11% growth to ₹548 crore. While recruitment remains the only profitable segment, exposure to IT and global capability centres (GCCs) remains significant, raising concerns about long-term demand. Valuations appear rich against modest billings growth. Info Edge Q3FY26 Summary (Bullet-Point Breakdown) Financial & Operating Performance - Revenue: ₹765 crore, +14% YoY. - EBITDA: +12% YoY, margin at 42.5% vs 43.1% YoY. - Recruitment (***** ₹548 crore, +11% YoY; accounts for ~75% of standalone billings. - Other segments (99acres, Jeevansathi, Shiksha): Loss-making. - Billings: +12% YoY, lagging revenue growth. Exposure to IT & GCCs - Direct IT/GCC exposure: ~25% of billings. - Including manpower consultants serving IT: 30–35% exposure. - Q3 billings growth: IT +14%, GCC +13%, showing no immediate strain. - Long-term risk: AI productivity gains could reduce IT hiring demand, weighing on billings. - Non-IT sectors: Combined billings grew only 2% YoY in Q3. Demand Trends - Jobspeak Index (Jan 2026): +3% YoY, weak hiring in banking, auto, FMCG offsetting gains in IT, hospitality, real estate. - Management cautious on near-term hiring environment. Dividend Policy & Valuation - Dividend payout revised to 65% of standalone net profit (earlier 25–40%). - Dividend yield remains modest (~1%). - Market cap: ₹73,000 crore. - Investments: Eternal (₹34,000 crore), PB Fintech (₹9,000 crore). - Adjusted valuation for standalone business: ~₹30,000 crore. - EV/EBITDA: 21x FY27E, considered expensive given only 12% billings growth in 9MFY26. Outlook - Near-term: Weak demand outlook, IT exposure risk, AI disruption concerns. - Long-term: Diversification needed to offset IT drag.