Below advise is for a long term view and should not be seen in short term.
Naukri or Info Edge is a leading online classified company in India with a diverse brand portfolio. It owns a number of brands in various fields, including recruitment, matrimony, real estate, education, and related services such as portals like naukricom, shikshacom, 99 acrescom and jeevansathiCom. Taking into account the company's quarterly performance, on a consolidated basis it reported an outstanding growth of 39.89 per cent from ₹421.42 crore registered in Q3FY22, recording total revenue of 589.52 crore in Q3FY23.
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The company delivered strong revenue growth with a standalone revenue increase of 33 per cent year-on-year, led by 40 per cent growth in the recruitment vertical. When the net earnings for the third quarter of FY23 were compared to the same quarter last year, a significant loss of 116 crore was reported. In terms of annual performance, the consolidated net profit of the company skyrocketed by 800 per cent to 12,759.57 crore from 1,416.31 crore the previous year. It has reported strong EBITDA growth of 56.17 per cent. Also, net sales climbed by 40.87 per cent to 1,589.03 crore as against 1,128 crore during the previous year ended on March 2021. At the time of writing, the company had a market value of 45,375 crore with the promoters owning 38.05 per cent stake. Institutional investors have a sizeable stake of 49.07 per cent, out of which foreign portfolio investors (FPIs) owned a significant 31.87 per cent. Considering its significantly high revenue contribution from the naukri.com business, signs of a slowdown in IT hiring with supply pressure easing and attrition moderating, the risk factor is high. Although the stock has a high PE ratio, return ratios like ROE and ROCE are also noticeably high, indicating the company's overall profitability. With a healthy level of earnings per share, the company declared an interim dividend of 10 per share in the previous quarter. Considering the price movement, the stock has room to grow as it is well below its 52-week high of 1912.90. Hence, we recommend BUY.
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