Info Edge Q3 results review, Motilal Oswal

Info Edge India Ltd. delivered a strong revenue growth in Q3 FY23, with a standalone revenue growth of 33% YoY (slightly ahead of estimates), led by 40% growth in the recruitment vertical.

Ebitda margin rose 450 basis points QoQ to 39.1% on account of lower employee costs, advertisement spends, and other expenses (strong beat).

Billings in Q3 FY23 remained strong (up 14.5% YoY to Rs 5.5 billion), and grew ahead of estimates, despite a slowdown in IT hiring.

The management sees clear signs of a slowdown in IT hiring, with supply pressure easing and attrition moderating. This remains a key risk, given its significantly high revenue contribution to the Naukri business.

On the other hand, non-IT hiring has picked up well, offsetting the pressure from the slowdown in IT hiring. We expect the recruitment vertical to see a flattish growth in Q4 FY23.

Nonetheless, it should maintain its strong revenue growth in FY23, on the back of a strong Q4 exit run-rate and good performance in nine months-FY23. We expect Info Edge to deliver a 16% revenue compound annual growth rate over FY23-25. Bloomberg