Recruitment Slowdown Shifts Focus to Zomato

Info Edge is undergoing a significant strategic shift. As demand in the key IT hiring sector shows mixed trends, with some reports indicating a slowdown in early 2026 and others projecting growth later in the year, the company's traditional recruitment engine faces challenges. This backdrop has increased the importance of Info Edge's substantial investment in Zomato, making the food tech giant a key factor in Info Edge's valuation and future outlook.

Info Edge Navigates Shifting Job Market

Info Edge, historically reliant on its dominant recruitment portal Naukri.com, is managing a difficult job market. While some forecasts predict a 12-15% rise in tech hiring for 2026, early 2026 data showed a 24% slump. Non-IT sectors like BPO, hospitality, and real estate are now driving job creation. This sector shift requires a review of Info Edge's core business performance, which is dealing with weaker demand. In response, Info Edge has increased its focus on investments, most notably Zomato. The company's market capitalization stands at approximately ₹63,438 Cr with a price-to-earnings (P/E) ratio around 47x as of May 2026. This compares to Zomato's significantly higher P/E multiples, which ranged between 377x and 676x in early to mid-2026, highlighting investor enthusiasm for the food delivery and quick commerce sectors.

Zomato's Growth vs. Profitability and Valuation Jitters

Zomato, now operating as Eternal Limited, has shown strong revenue growth, reporting ₹21,320 Cr in FY25, a 64.49% increase year-on-year. Its food delivery segment saw 21% growth in FY25. However, this expansion faces profit challenges and market scrutiny. Despite revenue increases, Zomato's net profit has been volatile, with Q4 FY25 profit falling 77.7% year-on-year to ₹39 crore. The acquisition and aggressive expansion of Blinkit into quick commerce, a sector where Zomato leads with over 50% market share, strains profits and efficiency. Analysts rate Zomato a 'Strong Buy' with 12-month price targets near ₹370, but this optimism is tempered by its very high valuation multiples.

Sector Growth Contrasts with Hiring Uncertainty

The food delivery market in India is projected to reach $27 billion by 2030, driven by more frequent orders and expansion into smaller cities. This positive sector outlook contrasts with the less certain IT hiring market. For Info Edge, analysts maintain a 'Buy' rating, with average 12-month price targets of ₹1,392 to ₹1,500, pointing to potential gains from its diverse assets and recruitment business. Zomato's analyst targets, while implying recovery, are around ₹255-370, reflecting its own market volatility.

Risks Mount for Info Edge's Zomato Dependence

Info Edge's reliance on Zomato carries risks that need closer examination. While Zomato posts impressive revenue figures and leads in crucial market segments like food delivery and quick commerce, its path to steady profits is challenged by aggressive expansion and strong competition. The company's P/E ratio, soaring into the hundreds (377x-676x), signals high investor expectations for future growth, a difficult benchmark to meet consistently without impacting profits. This high valuation is concerning given Zomato's volatile profits and ongoing investment needs, especially in the capital-heavy quick commerce sector.

Furthermore, Info Edge itself faces challenges. The company has seen significant insider selling in recent months, with more shares sold than bought. Its stock has experienced a significant drop over the past year, down nearly 30%. While Info Edge holds a diverse portfolio beyond Zomato, its current P/E of around 47x seems more reasonable than Zomato's, but relying heavily on a single, high-valuation, volatile asset like Zomato creates concentrated risk. The success of Info Edge's strategy depends heavily on Zomato's ability to turn revenue growth into steady profits and justify its high market valuation, a challenge many high-growth tech firms face.

Outlook: Info Edge and Zomato Face Future Headwinds

Analysts remain positive on Info Edge, with price targets suggesting significant upside, driven by its core digital assets and investments. For Zomato, analyst targets suggest it could recover from current price levels, but success depends on navigating competition, achieving steady profits, and justifying its valuation. The food delivery sector's steady growth offers a positive outlook, but successful execution and valuation discipline will be key for both companies.