Earnings Call: Naukri To Set Up Investments Team; JS Going Offline; Stats

Info Edge (BOM: 532777) (the Naukri Group) is setting up a separate team for investments, CEO and MD Sanjeev Bikhchandani revealed during an earnings conference call last week. The company, as reported earlier, is looking to raise Rs. 500 crores, which will primarily be used to fund acquisitions. They believe that there will be several opportunities in the Internet space in the next six months, particularly from the VC funded startups, so they need to be ready with funds. It seems as if there are either VC funded startups looking for exits, or Naukri is expecting some kind of a downturn. They’re also open to investments in the early stages. Which segments are they looking at? “We look at marketplaces, but are not ruling out other spaces entirely. However, we are not going into travel and e-commerce, but open to others.” Also “We’ve shied away from looking at pure substitutes. If the footprint overlap is high, you end up destroying value. So we look at complementary business to acquire, instead of substitutes.”

It was a lengthy conference call – lasted almost an hour – and the company shared statistics related to their sites, as well as plans. All the stats in the extended text.

Naukri.com
— Mid to high 80 percent of revenues are from recruitment. Net Sales: Recruitment business grew Rs. 333 million to Rs. 486 million for Q3, year-on-year. Stats from Naukri.com, as of December 31st
— 12 million resumes, adding 9377 resumes daily in Q3 (lower than previous quarter, because of festive season). Added slightly less than a million in the quarter.
— 36000 resumes were modified daily during the quarter.
— Serviced 16300 customers in Q3, up from 15300 in Q2. 26000 customers serviced in the 9 months this year, compared to 27000 for the entire year last year. Not likely to reach 38000-40000 by the end of the year.
— Share of IT has dropped to 30 percent from 31 percent last quarter. A lot of large IT companies want to get rid of their bench. Not too worried about slowdown — “They’re more likely to cut print spending first, then consultants, then other sites, and finally us.”
— Margins are in the high 30 percent range for the quarter.
May have something in next three to six months in the fresher space. A large number of small startups, who might use the space. There’s a churn in existing companies, and new companies coming up.
— Top 10 percent customers account for 60 percent of naukri corporate revenue

Other Verticals (apart from Naukri.com)
— Net Sales: Other verticals grew from Rs. 29 million to Rs. 59 million. The company has invested Rs. 100 million rupees in the nine months so far. Revenue will be in fits and starts.
— 99acres, allcheckdeals and js: topline is around 158 million rupees, year to date. loss at ebidta leel is 102 million rupees.

Jeevansathi.com
— 2.18 million profiles, up from 1.96 million last quarter. Added around 2500 per day.
— 21,000 paid transactions this quarter, same as last quarter.
— Achieved EBITDA break even because of lower ad spends. “We can break even, but need to spend more for growth”
— Opening fully owned offline centres in the quarter – 8-10 outlets, which will probably break even in 9-10 months.
— Hired a parallel sales team to focus on smaller accounts, so staff costs have risen
— Not looking at event management
— Average revenue of around Rs. 1400 per bill

99 Acres
— Market conditions are tighter, loss making at EBITDA level
— 69000 listings, with more paid listings than Q2
— 1500 unique paid customers, up from 1100 in Q2.

Shiksha, AskNaukri, Brijj
— Shiksha is tentative name, to be launched in the next six months. Brijj has less than a couple of hundred thousand registration. Happy if AskNaukri breaks even in a couple of years.

Disclaimer: I own an inconsequential number of shares of Info Edge

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