Info Edge Sees 2X Net Profit Growth In Q3 FY21; Plans More Investments

[What The Financials] Info Edge Sees 2X Net Profit Growth In Q3 FY21; Plans More Real Estate Tech Investments

SUMMARY

Info Edge earned INR 679 Cr in revenue, with expenses marginally increasing INR 223.3 Cr

The online classifieds company is also looking to acquire 12.3% stake in real estate tech company 4B Networks for INR 9 Cr

On a standalone basis, it has reported a 36.5% increase in its net profit on a quarterly basis

Infocus

What The Financials

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Noida-based online classifieds company Info Edge has reported a 107% increase in its consolidated profit on a quarterly basis in the third quarter of the financial year 2021. Its net profit has doubled from INR 328 Cr in Q2 to INR 679 Cr in Q3.

The company’s revenue has also increased by 7.4% from INR 289.8 Cr to INR 311.4 Cr in the same time period, while its expenses have marginally decreased by 0.2% to INR 223.3 Cr.

On a year-on-year basis, Info Edge’s revenue has decreased 13.4% and expenses fell by 10%. The company had reported a net loss of INR 62.1 Cr in the financial year 2020.

Profit before tax in Q3 FY21 stood at INR 87.45 Cr, down by 21.4% from INR 111.24 Cr from the year-ago period. The company’s current tax expense fell by 22.2% year-on-year (YoY).

Commenting on the same, Info Edge’s CFO Chintan Thakkar, said, “We have witnessed continued recovery during the quarter. The billings are up by 19% quarter-over-quarter (QoQ) basis. The Recruitment Solution and 99acres billing are nearing pre-pandemic levels on YoY basis.”

About 89% (INR 277.6 Cr) of the company’s revenue came from operations, while the rest 11% (INR 33.7 Cr) came from other sources in Q3. The company noted a similar ratio in Q2 of FY2021, while operational earnings contributed 94% of revenue to its bucket.

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Info Edge’s Spending On Employee Benefits Takes A Dip

Overall, Info Edge reported a 33% y-o-y increase in revenue between April 2020 and December 2020. It had earned INR 1066 Cr in the first three-quarters of FY2020 and INR 1,416 Cr for the same period in FY2021. The company’s expenses also increased by 33.5% to INR 995.2 Cr as net losses cut down to another 32% to INR 245 Cr.

About 60% of Info Edge’s spending went into employee benefits expenses. However, it noted 3% QoQ and 10% YoY (year-over-year) growth in this regard in Q3, with spending reaching INR 135.9 Cr. Whereas its spending on advertising activities and ‘depreciation and amortisation expenses’ stayed constant at around INR 50 Cr and INR 12 Cr respectively.

On a standalone basis, Info Edge has noted a 36.5% increase in its net profit on a quarterly basis, growing from INR 51.1 Cr (Q2) to INR 69.8 Cr (Q3). It reported a revenue of INR 303 Cr with expenses of INR 216 Cr in Q3. Subsequently, it’s profit margins reduced 23% from INR 88 Cr reported in the same quarter last year, while its revenue dropped 11% and expenses 4.5%.

It earned about INR 272.2 Cr through operations and INR 31.5 from other sources. On a YoY basis, its revenue dropped 15% from INR 320 Cr.

Info Edge Looks To Invest In Another Internet Business

Info Edge is an internet company founded by Sanjeev Bikhchandanu in 1995. The company runs 11 subsidiaries, including real estate platform Allcheckdeals.com, software company Interactive Visual Solutions and Smart Web, matrimonial website Jeevansathi.com, job portal Naukri.com, Delhi-based Newwinc Internet Service, along with Startup Internet Services, Startup Investments, Diphda Internet Services, HighOrbit Careers and Redstart Labs.

The company also has its own venture fund, through which it has invested in about 16 companies including Zomato, Happily Unmarried and ShopKirana among others. Info Edge owns about 17% stake in Zomato, and may turn out to be the biggest shareholders as ANT Group may partially exit the food aggregator business in its upcoming pre-IPO round.

The company has also entered into an agreement to invest about INR 9 Cr into 4B Networks, which is a platform for brokers and developers. The company will be acquiring 1,747 compulsorily convertible preference shares (CCPS) in the company, leading to a shareholding of 12.30% on a fully converted and diluted basis.

“As part of the company’s strategic investments, the investment would help the company to strengthen its offering in the real estate segment by providing a new platform to real estate industry professionals to conduct their business efficiently,” the company added.