ICICI Securities has kept a 'Buy' rating on Info Edge with a Rs 1,500 target price. The brokerage highlights steady recruitment growth and progress in new segments like 'Job Hai' as key supports. Investors are now weighing these operational gains against the upcoming departure of long-time CEO Hitesh Oberoi.
ICICI Securities recently released a report on Info Edge (India) Ltd, maintaining a target price of Rs 1,500. The brokerage noted that despite upcoming changes in top management, the company’s core business operations appear resilient. The report used a sum-of-the-parts valuation method to arrive at this figure, which assesses the value of different business segments individually.
The recruitment division remains the company's primary revenue driver. According to the brokerage, this segment has continued to grow at a steady rate of 14% to 15% year-on-year. This performance is significant because the broader IT sector, which is a major client for job portals, is currently facing hiring pressure. The ability to maintain growth despite these industry problems is a key factor in the brokerage's outlook.
Info Edge has also been focusing on new revenue streams. The 'Job Hai' platform, which targets entry-level roles, recorded an 86% increase compared to the previous year. Additionally, the company’s investment in artificial intelligence, including tools like AI REX and Talent Pulse, has reached an annual recurring revenue of approximately Rs 2.4 billion. These segments are part of the company's push to diversify its income beyond traditional job postings.
Regarding the property segment, the brokerage reported that the real estate portal 99acres has turned operating-cash positive. This is a notable shift from its previous phase where it required heavy spending. The company is also expanding its portfolio through investments in other digital assets, such as the premium dating application Aisle.
The company is currently preparing for a leadership transition, with Managing Director and CEO Hitesh Oberoi set to depart. ICICI Securities expects that the involvement of Founder Sanjeev Bikhchandani in overseeing this change will help maintain stability and reduce uncertainty for shareholders.
Investors should keep in mind that Info Edge’s performance remains closely linked to the health of the IT sector, as a prolonged slowdown in hiring can impact revenue. Furthermore, as a holding company with significant stakes in major listed entities like Zomato and PolicyBazaar, Info Edge’s overall valuation is often influenced by the market performance of its investee companies. Moving forward, the key items to monitor will be the sustainability of the profit turnaround in the real estate segment, the impact of the leadership transition, and the overall recovery trend in IT sector recruitment.