Info Edge Posts A Dismal Q3 As PAT Falls To INR 46 Cr

SUMMARY

The unusually dismal performance was the result of around INR 412 Cr in exceptional losses that the company generated during the quarter under review

Info Edge’s revenue from operations surged 1.39X to INR 589.5 Cr in Q3 FY23 from INR 421.4 Cr in Q3 FY22

Shares of the company closed 0.36% lower at INR 3,811 on the BSE on Friday

Online classifieds giant Info Edge’s consolidated net profit plummeted nearly 99% to INR 46.4 Cr in the quarter ended December 2022, down from INR 4,632 Cr a year ago.

The unusually dismal performance was the result of INR 412 Cr in exceptional losses that the company generated during the third quarter (Q3) of the financial year 2022-23 (FY23).

The matrix cannot be compared to the corresponding quarter of FY22, as, back then, the company rode on the wave of exceptional gains on the back of public listings of its portfolio companies – Zomato and PB Fintech.

Without the exceptional loss, Info Edge’s net profit stood at INR 458.1 Cr in the quarter under review.

Meanwhile, in Q3 FY23, Info Edge saw its revenue from operations surge 1.39X to INR 589.5 Cr in Q3 FY23, up from INR 421.4 Cr reported in Q3 FY22. The growth in revenue came largely on the back of an increase witnessed in billing numbers of its recruitment solutions and other verticals.

Meanwhile, total expenses continued to surge, up 1.33X year-on-year (YoY) to INR 422 Cr in October-December quarter. Of these, employee benefits accounted for the biggest chunk of expenses at INR 255 Cr, up from INR 193 Cr reported in Q3 FY22.

Advertising and promotion expenses accounted for the second biggest expenditure at INR 93.8 Cr, growing 1.1X from INR 80.6 Cr in the quarter ended December 2021.

Commenting on the quarterly results, Info Edge’s managing director and chief executive officer Hitesh Oberoi said, “While we are seeing a slowdown in IT hiring, the non-IT hiring market continues to be strong.”

Despite the losses, the company reported healthy growth in operational and other financial metrics. On a standalone basis, revenue rose 33.4% YoY to INR 555.2 Cr in Q3 FY23, while EBITDA for the quarter stood at INR 216.8 Cr. Cash from operations, on a standalone basis, stood at INR 241.8 Cr.

The recruitment solutions business contributed INR 436.8 Cr to the total revenue, while the education vertical, Shiksha, generated a revenue of INR 27.7 Cr. Proptech arm 99acres reported revenues of INR 72.9 Cr for Q3 FY23, and matrimony portal Jeevansathi saw its revenues plummet 26.3% YoY to INR 17.9 Cr.

Shiksha’s EBITDA for the quarter under review stood at INR 1.07 Cr, while 99acres posted an EBITDA loss of INR 23.2 Cr. Jeevansathi reported a loss of INR 25.3 Cr during the period under review, as its new strategy to drive traffic floundered.

Breaking Down Q3 Loss

What stood out like a sore thumb in the financial reports was the company’s exceptional loss of INR 412 Cr.

“In line with accounting policies consistently followed by the company, investment in 4B Networks Pvt Ltd, a partly owned subsidiary of its 100% subsidiary Allcheckdeals India Pvt Ltd amounting to INR 5,199.31 Mn… has been fully impaired, considering current state of affairs and other relevant factors including excessive cash burn, prevailing liquidity issues and significant uncertainty towards funding options,” said Info Edge in its quarterly filings.

The company made the provision of an impairment of INR 519 Cr for its partially owned subsidiary 4B Networks, which is the parent company of Rahul Yadav’s (one of the cofounders of Housing.com) new proptech venture Broker Network.

The Noida-based company also lapped up INR 108.1 Cr in exceptional gains in Q3 FY23, post which total exceptional loss stood around INR 412 Cr.

In September last year, the startup had raised INR 90 Cr in funding from Info Edge. In just four months, the bet appears to have failed, as the online classifieds giant pointed out that the new venture was burning excessive cash.

The mounting losses have put a spanner in the works for Info Edge, which has some of the biggest Indian new-age tech startups under its belt. After ramping up investments in multiple companies last year, Info Edge appears to have tightened its purse strings, as it looks to conserve cash for a bumpy year ahead.

The company declared the results after trading hours on Friday (February 10). Shares of the company closed 0.36% lower at INR 3,811 on the BSE on Friday.