The earnings print put it to rest. Shares were up 5% on Thursday and kept going, closing out Friday with a 6.34% gain to an intraday high of Rs 985.
Margin expansion and profitability
It all comes down to operating leverage. EBITDA margin has been put on a pedestal, moving from 33.1% to 38.3%, which is a mark of better cost control and the kind of scale you can only get at this size.
The rest of the P&L followed suit. EBITDA was up 34% to Rs 333 crore, on top of a 16% rise in revenue to Rs 869 crore. And when you add in a 22% jump in net profit to Rs 565.7 crore, you have a quarter that checks all the boxes.
Where growth is coming from
Recruitment is still the workhorse. The segment put up 12% in revenue and 21% in EBIT, driven by solid hiring and billings. In fact, overall billings are up 7.4% and 10% for recruitment, so this isn’t some fluke; the demand is there even with the macro being what it is.
99acres hits a profitability milestone
Then there’s 99acres. The real estate arm had a good one, with 36% revenue growth and, for the first time, positive EBIT. It’s a nice change of pace and takes some of the weight off the consolidated figures. Jeevansathi has been chipping away at the competition as well, and the company says both are holding their ground.
Key Q4 takeaways for core platforms:
– 99acres turned EBIT positive
– 99acres revenue grew 36 percent
– Jeevansathi gained market share
– Recruitment billings grew 10 percent
– Overall billings rose 7.4 percent
Competitive and strategic implications
With wider margins, Info Edge has the means to make its case against the likes of it. A 99acres that is profitable at scale is a different animal in a tough market, and the stickiness at Jeevansathi is hard to ignore.
What comes next
Management is touting the momentum in its consumer internet platforms and will be pointing to billings as a tell. What we’ll be watching is whether the margins hold, if recruitment can keep the double-digit billings growth up, and if 99acres can stay in the black.
But for the moment, the market is happy. You had 16% in topline, 34% in EBITDA and 22% in the bottom line, and that is why the stock is where it is.
