Info Edge Ltd, the owners of job portal Naukri.com and matrimony portal Jeevansathi.com, registered a close to 24% growth in revenues in second quarter of 2008-09 compared to the same period last year, however, the net profits stagnated. Info Edge did net sales of Rs 65.41 crore in Q2 2008-09 compared to Rs 52.60 crore during same period last year, while the net profits stood at Rs 15.67 crore in Q2 2008-09 at the same level as Rs 15.14 crore of Q2 last year. Can the company continue with the same growth and also maintain a higher profitability? VCCircle's Sahad PV chats with Sanjeev Bikhchandani, Managing Director of Info Edge.
Why has the profitability taken a hit?
Ebidta margings stay at over 40%. In fact, 46% this year compared to 42% last year. So we are maintaining the profitability. On the face of it the profits look stagnated, because we have made some investments. We invested Rs 5.7 crore this year in 99acres.com, Jeevansathi.com, Shiksha.com and Brijj. This is besides Rs 2.9 crore invested last year in these businesses.
How do you see keeping yourself growing in the coming months?
It's not a great economic environment. So we cannot expect to grow at 50% year on year. Our top 10% of clients are growing very slowly. So we intend to get our growth back during recession by focussing on medium and small size clients. We will engage with them more and in a better way.
How is the business doing?
We are seeing some softness on the branding solutions side (home page products and advertising). However, we are seeing steady growth in resume database business. It's an essential tool to hire, and so it's the most popular product and account for bulk of revenues.
Also among new businesses, 99acres.com is gaining traction since this is the time builders need us now to market their houses. During boom time, they didn't need us to certain extent.
Are you rationalising your staff to beat slowdown? How many people do you employ?
We have 1,800 people. We do not need to cut our staff in this environment. Because we can redeploy any excess staff in our growing businesses.
How much money do you have in the bank?
We have Rs 300 crore in the bank and is adequately funded to take on any eventuality. We will spend it very judiciously and will not waste a penny. Cash is the most important thing in this market.
Only if they make immense sense to us. We will not look at anything which do not have clear revenue models.
Where did you buy land?
Yes, we bought 1.25 acre-land in Noida (A Delhi suburb in Uttar Pradesh), which can accommodate an 800 seater building.