Info Edge (India) Limited (NAUKRI) Q3 FY23 Earnings Concall Transcript

Info Edge (India) Limited (NSE:NAUKRI) Q3 FY23 Earnings Concall dated Feb. 10, 2023.

Corporate Participants:

Hitesh Oberoi — Managing Director & Chief Executive Officer

Unidentified Speaker —

Chintan Arvind Thakkar — Director & Chief Financial Officer

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

Analysts:

Nitin Jain — FairGrowth Capital — Analyst

Vijit Jain — Citi Research — Analyst

Swapnil Potdukhe — JM Financial Limited — Analyst

Nikhil — Nuvama — Analyst

Deep Shah — B&K Securities — Analyst

Aditya Suresh — Macquarie — Analyst

Presentation:

Operator

Hi, everyone. Good evening, and welcome to Info Edge India Limited, Q3 ’23 Financial Results Conference Call. [Operator Instructions]

Joining us today from the management side, we have Mr. Sanjeev Bikhchandani, Founder and Vice Chairman; Mr. Hitesh Oberoi, Co-Promoter and Managing Director; and Mr. Chintan Thakkar, Chief Financial Officer.

Before we begin today, I would like to remind you that some of the statements made in today’s conference call may be forward-looking in nature and may involve some risks and uncertainties. Kindly reference Slide number 2 of investor presentation for detailed disclaimer.

I would like to hand over the conference to Mr. Hitesh Oberoi for his opening remarks. Thanks. And over to you, Hitesh.

Hitesh Oberoi — Managing Director & Chief Executive Officer

Thank you, Vivek. Good evening, everyone, and welcome to our third quarter earnings call. As always, we will start with an update on our standalone financials and discuss the market conditions for each of our operating verticals and then cover each — the business financials of each vertical in more detail. And then, of course, we’ll have time for Q&A. The audited financial statements and other schedules on segmental billing, revenues, etc., along with the data sheet have been uploaded on our website infoedge.in.

Overall billings in Q3 grew to INR550.7 crores, up by 14.5% from Q3 of last year. YTD billing growth — YTD billings stood at INR1,617.7 crores, a Y-o-Y growth of 33%. Revenue in Q3 stood at INR555.2 crores, up by 33.4% from Q3 of last year. YTD revenues stood at INR1,594.7 crores, a Y-o-Y growth of 44.1%. Billing and revenues along with the acquired businesses like Zwayam and DoSelect for the quarter stood at INR566.4 crores and INR571.6 crores respectively.

Operating expenses for the quarter, excluding depreciation and amortization, were INR338.4 crores, again up by 14.6% from Q3 of last year. Operating EBITDA for the quarter stood at INR216.8 crores versus INR120.9 crores last year and a growth of 79.3% from Q3 of last year and YTD EBITDA stood at INR563.9 crores. Operating EBITDA margins for the quarter stood at 39.1% compared to 29.1% in the same quarter of last year. And operating EBITDA, including acquired businesses, stood at INR220.3 crores, a Y-o-Y growth of 83.1%.

Cash from operations for the quarter stood at INR241.8 crores compared to INR251.6 crores last year for the same quarter. YTD cash generated from operations stood at INR625.7 crores. You may have seen in our results that we have fully impaired our investment of INR276 crores in 4B Networks Limited through our subsidiary in line with accounting policies and principles of conservatism, consistently followed by the company. While we continue to believe that the real estate tech market has potential and had hoped that this investment would work out, we took this decision to write-down the investment in the light of the current state of the environment and the significant uncertainty towards funding options available to 4B going forward.

Deferred sales revenues stood at INR835.4 crores as of 31st of December, 2022 versus INR623.4 crores as of December 31, 2021, an increase of 34% year-on-year. The cash balance of Info Edge, including the wholly-owned subsidiaries, stands at INR3,079 crores as on December 31, 2022. It stood at INR3,855 crores as of December 31, 2021.

In the recruitment business, our Q3 JobSpeak reported 8.8% Y-o-Y growth in hiring. However, IT sector hiring index was down by 14%. Amongst our non-IT customer base, sectors such as insurance, hospitality, retail and banking posted robust growth. We are seeing longer sales cycles and spend optimization — we experienced longer sales cycle and spend optimization during the quarter with various customers, especially in the IT sort of space.

In the real estate market, we are currently witnessing an active primary and secondary market with increasing prices across top cities. We’re also seeing higher demand for commercial space from non-IT and retail users. However, with the fixed rate increase in repo rates by RBI, we expect stability to return in this space in some time. In our education vertical, we are witnessing pre-COVID patterns of examinations and admission processes across the country. Students have returned back to campus for their classes and/or are open to going across the state for higher studies. However, we also noticed that students aspiring to study in the U.S. universities are facing some visa delays.

Moving on to the quarterly financials of the recruitment business, I will cover each business in detail. In Q3 of ’23, the recruitment segment billings were INR434.6 crores, up by 17.7% from Q3 of last year, while revenues were INR436.8 crores, up 40.3% from Q3 of last year. YTD billings stood at INR1,275.2 crores, a Y-o-Y growth of 38.1%, while YTD revenues stood at INR1,242 crores, a growth of 53.4%.

Operating EBITDA stood at INR274.7 crores for the quarter, up 46.5% from Q3 of last year and EBITDA margins stood at 62.9% versus 60.2% in Q3 of last year. Cash generated from operations for recruitment during the quarter stood at INR281.8 crores, up from INR260.7 crores in Q3 of last year. The business has generated 797 — the recruitment business has generated INR797.7 crores of cash from operations in the first nine months of this year.

Billings for Naukri India for the quarter stood at INR362.7 crores, up 17.8% year-on-year, while revenue for the quarter for Naukri India stood at INR367.7 crores — INR367.6 crores, up 43.3% year-on-year. Recruitment segment billing including acquired businesses like Zwayam and Do Select stood at INR450.4 crores, a growth of 20.2% year-on-year for this quarter. IIMjobs and hirist had a Y-o-Y growth of 30.5% in their billing numbers, closing at INR17.9 crores, up from INR13.7 crores last year.

We are seeing some concerns around macroeconomic factors, which have started impacting hiring on the platform by IT customers. The sales team is focused on increasing the velocity of closures and monetization of IT customers — non-IT customers during the quarter. Platform, the platform continues to witness vibrant job seeker traffic. Around 19,000 new CVs were registered per day during the quarter, a Y-o-Y growth of 15%.

In our endeavor to guide and enable job seekers in their career journey, we launched a series of podcast, videos and articles and new content series called [Indecipherable] Naukri. We maintained our marketing spend during the quarter in line to our previous quarter spends and focus on increasing reach of our digital video campaign, targeting the Gen Z audience. Our review and rating platform, AmbitionBox, continues retain its number one position as the employer review and rating platform in the country.

Moving on to the Shiksha business. In Q3, billings grew — Shiksha billings grew by 8.5% year-on-year and stood at INR27.8 crores, while revenue grew 26.2% year-on-year to INR27.7 crores. YTD billings stood at INR82.9 crores, a year-on year growth of 22.4%, while revenues were at INR84.8 crores with a year-on-year growth of 28.1%. The business made an EBITDA of INR1.1 crore during the quarter versus the profit of INR2 crores in Q3 of last year. Cash flow from operations for the quarter stood at INR2.6 crores against an inflow of INR13 crores in Q3 of last year. The business maintained its focus on Study Abroad business during the quarter as we see heightened interest among students to go abroad. We continue to invest in making our content more comprehensive and more student-friendly and building deep domain expertise in this space.

Moving on to the 99acres business. In 99acres, billings in Q3 grew by 15.7% year-on-year and stood at INR71.1 crores, while revenue grew from INR58.6 crores in Q3 to INR72.9 crores in Q3 of ’22-’23. YTD billings stood at INR207.9 crores, a year-on year growth of 36.8%, while revenues stood at INR209 crores, a year-on-year growth of 33.9%. The operating loss for the quarter stood at INR23.2 crores against a loss of INR22.6 crores in Q3 of last year. The business reported a cash outflow from operations of INR19.9 crores for the quarter against an inflow of INR1.7 crores in the same quarter of last year.

Revenue growth was recorded across all key categories in the real estate segment; resale, rental, commercials and new homes. We experienced higher acceptance of our premium listing amongst brokers during the quarter. And the platform also witnessed growth in responses in traffic during the quarter. We will continue to invest in platform, content, client delivery and marketing in the months to come.

Moving on to the Matrimony business, Jeevansathi. In Jeevansathi, Q3 billings declined by 30.1% year-on-year to INR17.1 crores and revenue declined by 26.3% year-on-year to INR17.9 crores. YTD billings stood at INR71.7 crores, a year-on year decline of 30%, while revenues stood at INR58.9 crores, a year-on-year decline of 21.3%. The operating EBITDA losses stood at INR25.3 crores for the quarter against the loss of INR37.2 crores in the same quarter of last year. Cash outflow from operations for the quarter stood at INR27.2 crores against an outflow of INR21.3 crores in Q3 of last year.

Our Free Chat model continues to drive profile growth and engagement on the platform. We had a significant reduction in advertising and marketing expense during the quarter backed by compelling proposition and effective marketing campaigns. The quarter also saw a complete revamp of the user experience on the apps and helped us improve — helping us improve discoverability of profiles on the platform. A few paid products were launched in December to experience monetization of increasing — with an increased user base. IEIL also continued its growth trajectory during the quarter. Vernacular apps in this space remained a strong idea of focus for us.

Moving on to the consolidated financial highlights. At the consolidated level, net sales for the company stood at INR589.5 crores in Q3 of this year versus INR421.4 crores in Q3 of last year. For the consolidated entity, at the total comprehensive income level, there is a loss of INR399.6 crores versus the gain of INR4,566.2 crores for the corresponding period last year — for the corresponding previous year quarter ending December 31, 2021. Adjusted for the exceptional items, PBT stood at a profit of INR511.2 crores in Q3 versus INR2,624.8 crores in Q3 of last year.

Thank you. We are now ready to take any questions that you may have.

Unidentified Speaker —

Thanks, Hitesh. [Operator Instructions]

Questions and Answers:

Operator

So we have questions, Vivek. I’ll take them one-by-one.

Unidentified Speaker —

Sure.

Operator

The first question comes from Nitin Jain from FairGrowth [Phonetic] Capital. Nitin, go ahead and ask your question.

Nitin Jain — FairGrowth Capital — Analyst

Yeah. My question is — thank you for the opportunity first. My question is on the 4B Networks write-off. So if you could clarify the rationale for writing off? Because I think until two quarters back, company was still investing in 4B. So what explains the sudden change? Thank you.

Hitesh Oberoi — Managing Director & Chief Executive Officer

Chintan, do you want to take that?

Chintan Arvind Thakkar — Director & Chief Financial Officer

Yeah. So you’re right. Like Hitesh also explained in his prepared commentary that we were pretty optimistic and we have been investing. And they’re also kind of been growing — trend good growth, they have built a solid team as well. But in last few months time given the rate of cash burn and the overall funding environment, the way it has changed, there is lot of uncertainty about the future funding environment. And I think that’s what is kind of causing us following the principles of conservatism that we thought that we should take a full write-off in this.

Hitesh Oberoi — Managing Director & Chief Executive Officer

Nitin, we had an interesting idea when we first invested and the company was — did well for a while and they were — at one point in time, 30% of all site visits in Bombay were happening through the app and which is why we invested more money. But I think the market has suddenly turned and it’s difficult to sort of see the company raising money going forward. I guess, that’s why we want to be conservative and that’s why we just sort of written off the investment.

Nitin Jain — FairGrowth Capital — Analyst

Okay. And just a follow-up on that. When you say the market and suddenly turned, are we seeing a similar impact in our real estate business, 99acres?

Hitesh Oberoi — Managing Director & Chief Executive Officer

No, I meant the funding market.

Nitin Jain — FairGrowth Capital — Analyst

Okay, okay. Perfect. Thank you.

Operator

Thanks, Nitin. Next question is from Vijit Jain from Citi. Vijit, go ahead and ask your question.

Vijit Jain — Citi Research — Analyst

Thank you. I just have two questions. So one, obviously, a pretty significant improvement in margins in the quarter, specifically in the recruitment business, right? As we look ahead, you’ve called out a little bit of challenges on the IT side. So I’m just wondering how should we think about it and how should we think about your A&P spending in that regard?

And my second question is slightly different one. Hitesh, I’m just wondering on the recruitment side, there are probably a lot of consultants who use your platform and then do other recruitment allied activities, including platforms which probably use it — resumes from your site and help companies build teams, etc. So do you look at these kinds of platforms who use your — who use Naukri differently? Do you monetize them differently?

Hitesh Oberoi — Managing Director & Chief Executive Officer

I think to answer your first question, see, we are seeing a slowdown in IT hiring. Our IT hiring was on fire for about seven, eight quarters, and that is why we were able to release great results for the first few quarters. And that’s why our margins grew substantially over the last couple of years. What we are seeing now is a slight slowdown in IT hiring, but non-IT hiring continues to be strong, continues to be solid.

If you look at our JobSpeak for the month of January, which we released recently, IT hiring was down 25%, but non-IT hiring — but overall, hiring was still up 2%. And because certain segments — non-IT segments are growing at 90%, 70%, 50% as well. So the non-IT market continues to be hot and that’s about 45%, 50% of our business. So a lot will depend on what happens to IT hiring going forward. If IT hiring bounces back strongly within a quarter or two and the Indian economy continues to grow at 6% or so per annum, we should be fine.

As far as our pricing model — pricing goes, we don’t treat platforms. So as far as we are concerned, we sell our access to our database and there are some terms and conditions which people buy — who buy that access are bound by. And as long as they adhere to those terms and conditions, we don’t price things separately for different customers.

Vijit Jain — Citi Research — Analyst

Got it. Thanks. Yeah, those were my two questions. Thank you so much.

Unidentified Speaker —

Aman, you’re on mute.

Operator

Thanks, Vijit. Our next question is from Swapnil from JM Financial. Swapnil, go ahead and ask your question.

Swapnil Potdukhe — JM Financial Limited — Analyst

Yeah, hi. Thanks for the opportunity. So first question is on your impairment side. So given that we have impaired 4B Networks now, is there a realistic possibility that there could be more impairments coming in other investments that we had done in the past? So that’s my first question.

Chintan Arvind Thakkar — Director & Chief Financial Officer

Look — may I take that, Hitesh?

Hitesh Oberoi — Managing Director & Chief Executive Officer

Yeah, yeah, please.

Chintan Arvind Thakkar — Director & Chief Financial Officer

See, there is nothing to announce right now. But in the AIF, we have a portfolio of 28 companies. It’s perfectly possible if something be impaired in this environment, but there’s nothing visible right now. We shall make announcements as and when we become cognizant of need to impair.

As far as strategy is concerned, I’m not sure, but Hitesh, you — I mean, maybe you can take that?

Hitesh Oberoi — Managing Director & Chief Executive Officer

Yeah. See, this is a fast-running environment, the funding environment I mean, and companies are sort of re-evaluating their — all the companies in our portfolio also they are sort of — they’ve gone back to the drawing board and they’re looking at their plans — growth plans once again. And of course, some companies are under more stress than other companies. So right now, we don’t have visibility on any other sort of environment or any other asset impairment in our portfolio. But the situation is dynamic and things change, like we change with every quarter. So let’s see what happens going forward.

Chintan Arvind Thakkar — Director & Chief Financial Officer

But you can — I mean, what we are committed to is, it was a good governance, fair disclosure, correct disclosure. And so as and when things arise, we will disclose, should they arise.

Swapnil Potdukhe — JM Financial Limited — Analyst

Got it. And the second question is with respect to competitive intensity in 99acres and Jeevansathi. Your losses have come down on a sequential basis over there. Has the intensity come down a notch due to macro factors and funding concerns for the competition or we have taken a strategic decision over there to not to spend much and conserve cash?

Hitesh Oberoi — Managing Director & Chief Executive Officer

So in Jeevansathi, we have changed the business mode And we are now — chat for example on Jeevansathi is now free and we’re experimenting with this new model and we are hoping that because there is stuff we give out for free, we will not have to spend as much money on marketing going forward. So we’re experimenting with our marketing spend and we started bringing it down slowly. And that’s — and hopefully, it will not impact our profile acquisition and it will not impact our revenue growth going forward. But early days on this one, so let’s see how this evolves.

As far as competition is concerned, they continue to spend like they were spending earlier. But if we start spending less, maybe they will also spend less going forward, who knows. As far as 99acres is concerned, again, we are trying to optimize our marketing spend a bit. We are working on a few interesting ideas. And it’s not as if competitive intensity has changed, but we are taking a breather and we are sort of revisiting our strategy and optimizing stuff at our end and then we’ll see how the site responds.

And so again, so let’s see what happens going forward. This is not — I mean, it’s not an indicator of things to come, let me put it this way. We are just conducting some experiments. And as a result of these experiments, sometimes marketing spend will go down, sometimes it may go up.

Swapnil Potdukhe — JM Financial Limited — Analyst

Okay. And just one more question if I can squeeze in. So given that we have a high base of billings in Naukri from last year, is it a realistic possibility that the billings can degrow in 4Q on a Y-on-Y basis given the slowdown in IT hiring, and IT contributes a significant portion of the base? So can you…

Hitesh Oberoi — Managing Director & Chief Executive Officer

No, no, it is a possibility. Of course, my internal target — the external target, which is a growth target, our internal target is 15% growth, but we don’t know where we’ll end up because we have seen a slowdown in billing growth over the last two, three quarters. In Q1, we were — our billing growth was 70%, 80% and in Q2 it came down to 50% odd, in Q3 it went down to 20%, 23%. So fingers crossed what will happen in Q4. We expect IT billing — non-IT billings to continue to sort of be solid because [Indecipherable] any indicator that market is still hard. But IT billing, we don’t know whether we’ve hit bottom as yet, right? And so it’s hard for me to predict what’s going to happen in Q4.

Swapnil Potdukhe — JM Financial Limited — Analyst

Good. Thanks a lot for answering those questions. Have I nice day.

Operator

Thanks, Swapnil. Next question is from Nikhil from Nuvama. Nikhil, go ahead and ask your question.

Nikhil — Nuvama — Analyst

Yeah. I have couple of questions. Hitesh, basically continuing with what Swapnil just said. In IT where recruitment was very solid has completely came to standstill. You’re saying it’s not from most of the IT services company, there is hardly hit in hiring. When we discussed with IT services company, they are saying that they are looking for monetizing what they have already hired. They are looking to increase the utilization. So can that — and even the hiring in coming quarter would be greater mix for freshers. That would be direct hiring better than through Naukri. So can the impact could be limited to quarter or the impact could be lower, six to nine months, a longer period of impact on our billings and overall growth? And second question is on the investment. So last time in your call, you talked about that we are a bit conservative on investing on start-up and new investment. Are we sticking with our policy or we are using the opportunity because of the decline in position to invest more? Thank you.

Hitesh Oberoi — Managing Director & Chief Executive Officer

I’ll let Sanjeev take the second one, but I’ll answer the first question. See, IT hiring has not come to a standstill because it’s not about just net hiring, it’s about gross hiring. So attrition rates continue to be high in a lot of companies. So attrition rates have of course started trending south, but companies need to also replace a lot of people to stay at the same number. And you are absolutely right in saying that they are perhaps adding less people than they were adding earlier. But attrition rates, when I last checked were reasonably high in a lot of IT services companies still. And it’s not as if our deal — our business in IT has come to us to a standstill, we’re still closing deals, we are still getting clients to renew with us, etc., etc.

What is happening is that the volumes have gone down compared to the same compared to six months ago and clients are taking longer to close deals and negotiating harder like all — like, it’s always a gains in such situations. Will this continue for one quarter or three quarters, I don’t know. A lot will depend on what happens in the U.S. market. Right now, there’s also a lot of bad press around companies laying off in the U.S., e-., etc. And that started impacting sentiment on the ground.

Our Start-up India also seems to be in some trouble. So that’s also had an impact on sentiment here. But what we’ve seen in the past at least, and I can tell you from our past experience that whenever there is a recession in the U.S., whenever there is a slowdown in the U.S., in the short-term, for a couple of quarters, hiring in India slows down. But in the long-term, actually more and more jobs are outsourced to India. So if that happens, this time around also, then who knows, IT hiring good pick-up actually in a very big way going forward. But it’s hard for me to predict what will happen at this stage.

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

Yeah. On the second question, could you please repeat it? I couldn’t hear you properly.

Nikhil — Nuvama — Analyst

Sanjeev, so basically, during last earnings call, you mentioned that we are going a bit slow on investing in start-ups, new age companies?

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

No, I don’t think I could have said that. Maybe I miscommunicated. What I did say was we are being more careful. And therefore, a bar for evaluation is higher. We are not now worried about missing investment. We are more worried that we don’t do the wrong one, especially since we don’t know if there will be a follow on round from another investor or not. There might be or there might not be because everybody is being a little bit more careful. So we are investing, but we are being a little slower.

Nikhil — Nuvama — Analyst

Understood. That’s all from my side. Thank you, Hitesh, and thank you, Sanjeev.

Operator

Yeah. Thank you, Nikhil. The next question is from Deep Shah from B&K Securities. Deep, go ahead and ask your question.

Deep Shah — B&K Securities — Analyst

Yeah, hi. Thanks for the opportunity. So Hitesh, I hear you well that you were trying a lot in 99acres and done some experiments on the way. I just want to understand better if you could help us, because the fact is that we have been growing revenues. So the market has not become like the matrimonial market where things are sluggish. So we have been growing revenue, but at the same time, maybe it’s marketing, maybe something else which is always kept in the red. So if you could just explain how the market is panning out? Is it that the overall size is not increasing, it’s only digital spends which is going up? And what are we trying to do? If you could elaborate a bit more, that would be very useful? Because this was a massive opportunity in all of our understanding, but then the monetization is only getting protracted.

Hitesh Oberoi — Managing Director & Chief Executive Officer

So let me — yeah, so let me just explain. So see, for a long time the real estate market was in trouble, in the sense that not enough people were buying property, prices had not — were not moving up, unsold inventory have been going in various — in different cities and customers have been cutting their spend, right, and transactions had fallen off a cliff. In fact, even in 2019 or ’20 or even ’21, maybe they were still lower than what they were 10 years ago.

What do you see is a turnaround in the market at least. The sentiment has changed. There is enough interest in real estate. People are buying. Prices are going up. The market has consolidated over time though. There are fewer developers and they have a larger sort of share of the market than was the case five years ago, 10 years ago. Of course, there — and the digital spending has also grown and customers are spending more than earlier. In fact, we may be now in a situation where a lot of the projects are getting sold without spending because there’s so much interest in the market, which is also not good news for us, because we like — we always like the market to be somewhere in the middle. Because if it’s very easy to sell real estate, nobody is required. So that’s a danger. But again, home loan rates have started going up and so on and so forth. And so we will sort of hit — it will remain some time.

As far as we are concerned, our revenue is growing. We are up maybe more than 30% over last year and for the first nine months of this year. We are investing a lot in the business, both in marketing and in content creation and in user experience on the platform. Of course, we got hit very badly during COVID and our costs have gone a little out of control over the last couple of years because of COVID because we have to — because the tech market was also very hot, we have to give many increases to retain our talent and so on and so forth. Things are now beginning to normalize and stabilize on that front. And if we are able to continue to grow revenue going forward, then things should be fine.

At the same time, the competitive intensity in our space has also increased because there are a lot of well-funded players, like housing for example, which is owned by REA. They’ve been very aggressively spending in the market to acquire customers, to acquire users. There are other well-funded VC start-ups also who have been sort of making a lot of noise. So while the market is growing, at the same time, competitive intensity has also increased substantially over the last seven, eight quarters. So we are — we have a few good ideas, we’re working on them. And if we are able to execute well, then things should start getting better. But if the competitive intensity continues to increase then we will be also forced to respond to defend our position. And so let’s see how this plays out in over the next few quarters.

Deep Shah — B&K Securities — Analyst

Right, right. Hitesh, thanks for that. Again, I know you answered these in the previous quarters, but — and correct me if I’m wrong. But what we’ve seen is despite the on and offs in the real estate space, the broking or offline broker community, they have done pretty solid in this period before what you pointed out that properties had been sold even without intervention. So where has been that reluctance to re-enter this market? We’ve been in this market earlier, I guess, 2014 or ’15 some time. Where is this reluctance to enter this market coming from? And is it…

Hitesh Oberoi — Managing Director & Chief Executive Officer

The broking market you’re saying?

Deep Shah — B&K Securities — Analyst

Yeah, the offline broking market. And if we could better explain to us what is the perspective of not getting on the ground?

Hitesh Oberoi — Managing Director & Chief Executive Officer

Yeah. So that’s a very different business. It’s a transaction business. And see, we run a platform where we actually today work with over 20,000 brokers, largest probably work with hundreds of channel partners. We work with mom-and-pop shops. We work with resale brokers, rental brokers, commercial brokers, channel partners who sell new homes. We work directly with builders as well. So the model we are pursuing is very different. It’s a market-based model, advertising-led model, listing-led model. We don’t get into the transaction. We just enable the transaction. We just enable handshakes.

In the long run, we feel that if we are able to dominate this market, margins can be very, very solid, just like we have in — just like you see in the Naukri business. The analogy there would be why don’t you — I mean, why don’t we not become a consultant. Why don’t we not become a recruitment firm. Some years ago we took that call that we did not want to be a recruitment firm, we wanted to be marketplace.

Now the problem in real estate is unlike in the recruitment space where we dominate, here there is more competition. And therefore, we may not able to realize the kind of margins we realize in Naukri. And now, can we become a broker? We can. But frankly, there are hundreds of brokers out there. There’s not much difference between them. Sure, you can make some money like all recruitment firms make money, but that business is hard to scale. And in a good time, to all look good. In a difficult time, it’s very, very hard to survive as a broker. And that business is not very tech-intensive. And it scales with headcount, it scales with people, it does not scale with technology.

So our view is that you can get a lot of revenue, you can get some profit, but it’s very hard to build a very valuable brokerage. On the other hand, if we are able to win in this space, we may not win because there may be just one or two winners, then you can build a valuable business. And we would therefore rather focus on this than spread houses and trying to do many things at the same time.

Deep Shah — B&K Securities — Analyst

Right, right. Hitesh, that’s…

Hitesh Oberoi — Managing Director & Chief Executive Officer

The other thing I want to say, see, if we become a broker also, then many of the brokers may not want to work with us. So that’s the other challenge of wanting to become a brokerage.

Deep Shah — B&K Securities — Analyst

No, right, Hitesh. Thanks. That’s a very interesting perspective. Thank you so much.

Operator

Yeah. Thanks, Deep. The next question is from Aditya from Macquarie. Aditya, go ahead and ask your question.

Aditya Suresh — Macquarie — Analyst

Hi, Hitesh. Hi, Sanjeev. Thank you for the candid remarks. Sanjeev, maybe the first question for you on the AIF. Where are you putting new capital to work, if at all? And maybe if you can also provide some context in terms of what are the types of opportunities which might have looked interesting maybe 12 months back, but now in this environment you’re not really pursuing?

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

So we’ve always been vary of stuff like crypto, and this is from the beginning. And therefore, one of the internal discussions we have is, if you can’t understand it, don’t invest in it. And we’ve sort of impaired in our understanding of crypto. Similarly, Web3. I think it’s a great idea, great concept, but we don’t know what the use cases that we’ll make money. So we’re a little slow on crypto and Web3, but that’s not new. We’ve been slow since the last couple of years, ever since we first heard of it. So we may have done one or two investments. We have a flavor of Web3 and crypto. We are likewise skeptical of Meta. We don’t understand, we have not done it. So in that sense, we are a little bit slow of the blocks in this new stuff which until we fully comprehend it and until the fog lifts, what will work, what will not work.

Having said that, we are doing some frontier technology in Capital 2B. We continue to do Internet B2B SaaS, mobile app in Info InfoEdge Ventures Fund 2. Typically, we don’t sectors and do it to top-down. We do it bottom-up, reflects stock-picking for U.S. If there is a good team chasing a good thing that looks like it could work, it’s getting some traction, we look at it closely. And if you really continue to like it, as you do a deep dive, maybe you can go into it. Some amount of caution. We are looking at not doing very large first checks. Given the environment, we ourselves are reducing the risk. We are looking at possibly co-investing with others again to share the risk and to get more deep pockets around the table. But like I said, it’s bottom-up, it’s not top-down.

Aditya Suresh — Macquarie — Analyst

Maybe, Hitesh, for you, and apologies for the generic nature of the question. But what are your top three priorities for Info Edge?

Hitesh Oberoi — Managing Director & Chief Executive Officer

Sorry, can you repeat that?

Aditya Suresh — Macquarie — Analyst

What would be your top three priorities for Info Edge this year?

Hitesh Oberoi — Managing Director & Chief Executive Officer

Top three priorities for Info Edge? So one of course, we want to sort of continue to grow our Naukri business rapidly. We’ve done really well for the last seven, eight quarters. And Naukri, actually grew like a start-up. And we’ve also sort of acquired a lot of assets in adjacent areas. And after a long time we’re seeing India also sort of grow at a faster — on a faster rate. The Indian domestic sort of economy is doing well.

I was just selling somebody 10 or 12 years ago, the infra sectors, all the heavy engineering and construction, real estate, all these sort of roads, construct, railways, power, all these sectors together were as big as IT for us. But then our all capital spending came to a stop for a long time and they stayed where they were and IT grew 4 times or 5 times. Hopefully, with the government sort of taking up intra spending on priority, some of these sort of jobs will come back and these sort of verticals will also start growing rapidly for us.

So the Naukri business continues to be a number one priority because that’s our bread-and-butter business, it generates all our profits. We need to defend our market share. We are investing in adjacent areas. We are investing in the core platform. We have set-up a very high quality AI machine learning team to improve the user experience for both job seekers and customers. So Naukri, without any doubt, continues to be our number one priority.

Then of course, the other verticals we are in. So we realize that these verticals have been struggling for a long time. And something or the other has sort of kept them from sort of breaking away from competition. So 99acres is a very important priority for us. And personally, I’m spending a lot of time on that vertical to see and it’s not a small vertical anymore. We have an internal target or — internal billing target of INR100 crores in 99acres for Q4, we’ll see where we end up. But the run rate is getting better with every — and it can become a large business over time if it gets the focus and attention it needs. So that’s an important sort of priority for the company.

Shiksha has surprised us. Shiksha has been growing at a reasonable rate. And without us focusing or spending and spending too much energy and time on the business, it’s now a profitable business. It’s small, but profitable. So the other verticals are important. We are also sort of spending a lot of time on our Blue Collar Job Board, Job Hai. We have been sort of test-marketing it, testing it out in a few cities and early signs are encouraging. So at some point in time, we’ll want to sort of scale that up as well.

And till some time back and continues to be of course, but attracting and retaining high quality talent was of top priority for us because the start-up market was super hot and it was getting harder and harder to attract and retain people. Thankfully, I mean, that’s come under control now because we are now seen as a stable mature business. But because the start-ups has slowed down, it’s also an opportunity for us to attract then some good new talent into the company, and that will always remain a top priority for us.

Aditya Suresh — Macquarie — Analyst

Thanks, Hitesh.

Operator

Yeah. Thanks, Aditya. We have follow-up question from Nitin Jain from FairGrowth Capital. [Operator Instructions] Nitin, go ahead and ask your question.

Nitin Jain — FairGrowth Capital — Analyst

Yeah. Thank you for the follow-up opportunity. My question is both for Hitesh and Sanjeev. So I’d like to pick your brains, as in drawing on your previous experiences where there have been such funding winters in the market and has it like has it been a strategic advantage for a firm like — cash-rich firm like Naukri because we keep continuously investing in newer businesses? So if you could share your experience? Thank you.

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

You want to go first, Hitesh?

Hitesh Oberoi — Managing Director & Chief Executive Officer

Yeah. So see, this is an opportunity, but you have to keep it. So what you have to do, do things right. So you — we are — like you said, we are cash-rich. Now if the market slows down and we continue to invest because we are cash-rich, then when the market comes back, we will emerge stronger. So in Naukri, for example, right now the market is slowing down a bit, but see, in Naukri, we’re already dominant. But still, if we continue to sort of invest in Naukri as if there is no slowdown, our position will be even stronger when the market comes back, especially if our competition starts or cuts down on it sort of investments in their business.

In 99acres, the same thing would play out, but the 99acres market is not slowing down. So I don’t expect competition to slowdown their investments in real estate. The real estate market continues to be solid. So we don’t see any slowdown on that front. But on the whole, you are right, in a slowdown, if a company continues to invest in its business, then when the market comes back, it’s great for the company, especially if others cut down on their investment.

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

Yeah, I’ll add to that. You see if I look back, just go back in year 2000, 2001, there was a dot-com meltdown, bubble burst. Around that time, now partly out of ignorance, partly out of misplaced confidence, we did not sack people. In fact, we hired 80 sales people in 2001, at a time when our competition let go of 80 sales people. Now a decision like that really helped us because we continue to grow and we came out of that meltdown profitable as compared to when we went in.

Then you go to the global financial crisis. There, we had a 43% or 44% traffic share at the beginning of the global financial crisis. Three years later, we had a 63% traffic share in Naukri, I’m talking about Naukri. And that’s largely because our competition, Monster, TimesJobs, they all let go off sales people. We did not let go off people. We simply did not sack. We were happy to live with lower profits for two or three quarter. We said we will keep our capabilities alive and intact. Competition cut advertising I remember by 60% or 70%, we cut advertising only 15%. Once again, we said we’ll take lower profits, but we will keep the business capability and the brand salience intact. That paid rich dividend. And therefore, when we came back, we came back with a roar.

Let’s take a look at 2020. COVID lockdown, Naukri was minus 44% Y-o-Y in quarter one of 2021, April-June 2020, minus 44% billing growth Y-o-Y. We requested Chintan saying, listen, can you stress test our P&L balance sheet and our cash results. And the question we put to him was, if we have zero revenue, zero revenue, not zero profit, zero revenue. If revenue was at zero and we cut marketing spend zero and zero increments, how long can we live as a company with the current cash results? And the answer he came back was three years. The moment he said that, we said, okay, that’s enough runway and we simply did not downsize. At a time during COVID when everyone — a lot of other companies were downsizing, we simply said, listen, we are a people’s company. This is the wrong time to [Indecipherable] COVID, there’s no light at the end of the tunnel. If you let go then we don’t know what will happen to them. [Indecipherable] At the same time, this thing will turn around and good time — and we’ll start growing again. We don’t know when, but we will start.

So preserving our capabilities in times of recession and not cutting back on investments too much has paid us rich dividends on three separate occasions; 2000, 2008-’09, and again, 2020. So of course, as Hitesh said, you’ve got to cut the right — cut some expenses, keep the right ones intact, be a little more careful about how you’re investing. And if you manage that right, hopefully, it will help.

Do you want to add something, Hitesh?

Hitesh Oberoi — Managing Director & Chief Executive Officer

See, like I said, in the case of Naukri, in the question of laying off, etc. does not arise. But there is very little to gauge in the sense that we’re already 70%, 80% of the market. But yes, in our newer verticals, in all the new businesses that we acquired, there is still massive opportunity to grow, whether iimjobs or whether it’s Job Hai, which is just a start-up inside the company. We will continue to invest in these verticals because there is just — I mean, we’re just starting and we don’t have any constraints. Profitability may go down for a while, but like I said, in the past we’ve seen even when the companies have laid off in the U.S., after a couple of quarters they’ve gone back and hired very strongly in India because that’s part of their sort of — part of the solution, India is part of the solution to cut cost. So — and in the other verticals, we are not seeing any slowdown at the moment in the market at least.

Nitin Jain — FairGrowth Capital — Analyst

Okay, great. Thank you both of you. That’s quite insightful. Just a follow-up on that. So how does your nature of funding change in such times? Like do you concentrate more on manpower or technology or ad spends?

Hitesh Oberoi — Managing Director & Chief Executive Officer

See, in the long run, we believe that investment in product, technology, user experience is what takes you ahead. So we will continue to invest aggressively in these areas. And we’ve never cut headcount. In fact, our headcount has always grown in this part of the business. Number one. Secondly, we continue — we believe that we need to invest in new cutting-edge emerging areas. So we’ve been investing very aggressively in AI and machine learning for the last few years. Now we’ve set-up a new team for AI, machine learning. We are experimenting with video content and so on.

So in the new areas, we want to invest and we will continue to invest more, because if you get that right, you can actually help your — you could even move your business to the next level. So we don’t want to cut down on new emerging — on investing in new emerging areas. It’s important for the long-term sort of health of the company. See, marketing spend is something you can play around. You can turn on the tap anytime, turn off the tap anytime. And there, it’s often a function of — see, what we measure is share of voice. See, if our competition is spending a lot, then you have to spend a lot. But if competition cuts down — but let’s say we are at X and competition at X and they certainly go to zero, then you can go down to X by 2 also, it doesn’t matter. You’ll still get your growth.

So there, it’s more a function of how much is competition spending more than anything else, because you don’t want to lose share of voice. If other stops spending and you spend even a little bit, you are still okay. But if others are spending a lot and you stop spending, then you can’t get any market share. So there, I think we go by what the others are doing more than anything else, because it’s not required to — you don’t need to spend a lot of money if others are not spending.

Nitin Jain — FairGrowth Capital — Analyst

Thank you. Thanks again.

Operator

Thanks, Nitin. I think that was the last question we have for today. So do we wait for some time?

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

Maybe we can conclude the call.

Unidentified Speaker —

So ladies and gentlemen, this will conclude the call. Thank you for joining us today. You may disconnect your lines.

Hitesh Oberoi — Managing Director & Chief Executive Officer

Thank you, all. Have a great evening.

Sanjeev Bikhchandani — Founder and Executive Vice Chairman

Thank you. Thank you. Bye, bye.