Info Edge (India) Limited (NSE: NAUKRI) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Anand Prakash Bansal — Vice President, Administration and Facilities
Vineet Ranjan — Senior Vice President, Investor Relations
Hitesh Oberoi — Co-Promoter & Managing Director
Chintan Thakkar — Director & Chief Financial Officer
Sanjeev Bikhchandani — Founder & Vice Chairman
Analysts:
Sachin Salgaonkar — Analyst
Ankur Rudra — Analyst
Nikhil Choudhary — Analyst
Swapnil Potdukhe — Analyst
Damodaran N — Analyst
Vijit Jain — Analyst
Presentation:
Anand Prakash Bansal — Vice President, Administration and Facilities
Good evening, everyone. I am Anand Bansal and I am joined today by my colleague, Mr. Vineet Ranjan. Thank you for joining us. We will wait for a couple of minutes to allow more participants to log in. Vineet, we currently have over 100 participants on the call.
Over to you to get us started.
Vineet Ranjan — Senior Vice President, Investor Relations
Thank you, Anand. Good evening, everyone. Welcome to Info Edge (India) Limited Q4FY25 earnings conference call. Joining us today from the management, we have Mr. Sanjeev Bhikchandani, Founder and Vice-Chairman; Mr. Hitesh Oberoi, Co-Promoter and Managing Director; Mr. Chintan Thakkar, Director and CFO.
Before we begin, I would like to draw your attention towards the detailed disclaimer included in the presentation for good order’s sake. Kindly note that this conference call is being recorded. All participant lines will be in listen-only mode and there’ll be an opportunity for Q&A after the presentation concludes.
Now I’ll hand over the call to Mr. Hitesh Oberoi for his opening remarks. Thank you and over to you, Hitesh.
Hitesh Oberoi — Co-Promoter & Managing Director
Thank you, Vineet, and very good evening, everyone and welcome to Info Edge’s earnings call for the fourth quarter of FY25. We will start with an update on standalone financial performance, then cover segment-wise performance along with the commentary on each business. And then, of course, we’ll have time for Q&A.
For the standalone business in Q4 of FY25, billings were INR984 crores, a Y-o-Y growth of 19% and revenue was INR687 crores, a Y-o-Y growth of 13%. Billings and revenue including Zwayam and DoSelect were INR1,015 crores and INR718 crores, respectively, a Y-o-Y growth of 19% and 13%. Operating profits at a standalone level grew by 3% Y-o-Y to INR231 crores and the operating margins stood at 34%. The standalone business generated cash from operations of INR536 crores in Q4 of FY25, a Y-o-Y growth of 15%. In Q4 of FY25, the cash generation from the recruitment business was INR532 crores, a Y-o-Y growth of 16%. The non-recruitment businesses at an aggregate level were also cash positive and generated INR40 crores of cash in Q4 of FY25.
For the full year FY25 for the standalone business, billings were INR2,882 crores, a Y-o-Y growth of 15% and revenue was INR2,654 crores, a Y-o-Y growth of 11%. Billings and revenue including Zwayam and DoSelect were INR2,972 crores and INR2,743 crores, a Y-o-Y growth of 16% and 12%, respectively. Operating profits at a standalone level grew by 12% year-on-year to INR973 crores and the operating margin expanded to 37%. The standalone business generated cash from operations of INR1,318 crores in FY25, a Y-o-Y growth of 16%. The recruitment business generated cash of INR1,344 crores in FY25 and the non-recruitment businesses combined also generated a cash of INR21 crores in FY25 vis-a-vis a cash loss of INR44 crores in FY24.
EPS before exceptional items net of tax and deferred tax for FY25 stood at INR77 pre-split of shares and INR15 post-split of shares, a Y-o-Y growth of 17%. The company has received shareholder’s approval to split the existing equity shares from a face value of INR10 to a revised face value of INR2. The cash balance of Info Edge including wholly owned subsidiaries at the end of March 2025 stood at INR4,786 crores. The board has proposed a final dividend of INR18 per share pre-split or INR3.6 per share post-split. Along with the interim dividend, the total dividend of FY25 is INR30 per share pre-split or INR6 per share post-split, a 36% year-on-year increase in dividend payout. The headcount of the company as of March 2025 was 6,065 people, yes.
Moving on to segment-wise performance, starting with the recruitment business. In Q4 of FY25, billings grew by 18% to INR740 crores and revenue grew by 13% to INR511 crores. The operating profit improved by 8% Y-o-Y to INR278 crores and the operating profit margin was 54%. Cash generated from the recruitment operation was INR532 crores, a Y-o-Y growth of 16%. For FY25 as a whole, in the recruitment business, billings grew by 15% to INR2,158 crores and revenue grew by 10% to INR1,983 crores. The operating profit stood at INR1,116 crores and the operating profit margin was 56%. Cash generated from the recruitment operation in FY25 full year was INR1,344 crores, a Y-o-Y growth of 11%.
The key operating highlights of the recruitment business, the billing growth rate in Q4 was broad-based across all segments. Tech, IT services and BPM combined grew by 17%, GCCs by 19%, other sectors by 19% and the Recruitment Consultant segment by 15%. GCCs contributed around 16.5% of recruitment India B2B billings in FY25. Key sectors like BFSI, healthcare, manufacturing and infrastructure grew at double digits. The JobSpeak index showed muted movement in Q4 ’25 reflecting a moderate hiring environment. Despite this, our billings improved driven by growth across both our core business and niche and adjacent segments. Our niche and adjacent businesses such as IIM Jobs, Naukri Gulf and Naukri Fast Forward have all continued a good growth trajectory in Q4 FY25 as well with year-on-year billings up by 43%, 26% and 18%, respectively.
Our employer branding solutions offered across platforms like Naukri, IIM Jobs, Hirist and AmbitionBox have also been well received by our clients. We are working on strengthening these offerings further and expanding and penetrating the market a little more. FY25 was also the first full year of monetization of JobHai. This business has been growing well in terms of traffic. Although still small, it holds great potential and could become a sizeable business in the medium to long term. On the job seeker side, our Naukri platform now hosts around 106 million resumes and added an average of 22,000 resumes daily in Q4 of FY25.
On the recruiter side, the Naukri business served over 128,000 corporate customers in FY25. We continue to invest aggressively in marketing activities in areas of B2C, B2B, branding and job seeker engagement activities including IPL advertising which started in March this year leading to some impact in Q4 margin. In summary, our recruitment business continues to grow across all customer segments complemented by strong performance in our niche and adjacent businesses. We remain optimistic that this positive momentum will carry forward into the quarters if the hiring environment continues to be modest.
Moving over to the real estate segment. In Q4 of FY25, billings growth improved by 22% to INR160 crores and revenue grew by 14% to INR106 crores. Operating losses were INR15 crores and the business generated INR27 crores of cash from operations in Q4 of FY25. For the full year, billings growth was 17% at INR451 crores and revenue grew by 17% to INR411 crores. Operating losses reduced by 31% to INR48 crores in FY25 versus INR69 crores in FY24. The 99Acres business was cash profitable for the full year with cash generation of INR2 crores from operations in FY25 versus cash losses of INR13 crores in FY24.
For 99Acres, growth in Q4 was driven by growth in both the number of billed customers and in the average billing per customer. The broker and channel partner segment grew faster than developers. The number of live new project listings on the platform grew 11% in Q4 and the live resale plus rental listings from brokers grew by 27% in Q4. Listings from owners grew 14% year-on-year. We believe we gained a significant market share in Q4 and in H2 of last year. In upcoming quarters, 99Acres will continue to focus its investment on growing its user and client base and aim to deliver a superior platform experience to help users make the right real estate decisions.
Moving over to the matrimony business. In Q4 of FY25, billings grew by 24% to INR32 crores and revenue grew by 25% to INR30 crores. Operating losses reduced on a year-on-year basis by 76% to INR2 crores. Cash losses from operations also reduced by 73% to INR2 crores at Q4 of ’25 versus INR9 crores in Q4 of ’24. In full year FY25, billings grew by 31% to INR111 crores and revenue grew by 29% to INR110 crores. Operating losses reduced by 80% year-on-year to INR12 crores in FY25 versus INR59 crores in FY24. Cash loss from operations was INR8 crores in FY25 versus INR55 crores in FY24.
In Q4, the Jeevansathi business team continued to build on its monetization efforts capitalizing on the strongest marriage season of the year to grow billings. Enhancements to the recommendation system were also introduced to improve relevance, engagement and user retention. New monetization levers were rolled out early in the quarter, some of which are already showing positive impact on user conversion and revenue generation.
Marketing investments are increasingly made sharper to drive better efficiencies. The quarter also saw continued innovation in launching new content pieces, which were well received in our target markets. These initiatives helped the business build a salient brand amongst both prospects and their parents. The team remains focused on enhancing the platform experience through new feature development and by leveraging machine learning and generative AI tools. Key engagement metrics such as profile acceptances and the frequency of two-way chats continue to perform strongly.
Moving on to the education business. In Q4 of FY25, billing was INR52 crores, a Y-o-Y growth of 16% and revenue grew by 2% to INR40 crores. The business was at a breakeven level in terms of operating profit and generated cash from operations of INR16 crores in Q4 of FY25. In the full year, billing in Shiksha was INR162 crores, a Y-o-Y growth of 14% and revenue grew by 8% to INR150 crores. Operating profits were at a breakeven level for the full year and the Shiksha business generated cash from operations of INR26 crores in FY25. Within the Shiksha business, the domestic education business grew by 26% year-on-year and the study abroad business declined by 16% year-on-year leading to an overall billing growth of 14%.
The domestic private universities and colleges continue to expand their course offerings beyond engineering with more choices available to students. The emergence of new private universities in India presents an opportunity for Shiksha to further expand its footprint. We are investing in creating more comprehensive student-friendly content and building deep domain expertise in this segment. Higher visa rejection rates for those aspiring to study in the U.S. and a decline in job prospects for students abroad have reduced student interest. Students are now opting to study more in the U.K. and Continental Europe.
On the AI front, our current focus is on three key AI-driven priorities, enhancing existing products using AI, developing new AI-powered features in existing products and building brand new products which leverage AI. In line with this, we continue to upgrade our database product with AI and machine learning resulting in improvements in recruiter productivity. Similarly, new AI models for job search and recommendations have driven a 15% to 20% year-on- year improvement in job seeker engagement. Our AI initiatives continue to drive growth across all our verticals, recruitment, real estate, matrimony and education.
Moving on to the consolidated financial highlights. At the consolidated level, the net sales for the companies stood at INR750 crores in Q4 of ’25 versus INR657 crores for Q4 of FY24. The total comprehensive loss was INR9,710 crores in Q4 of ’25 compared to a comprehensive income of INR7,959 crores in Q4 of FY24. Profit before tax without exceptional items in Q4 of ’25 was INR716 crores compared to INR324 crores in Q4 of FY24.
To summarize, we continue to be enthusiastic about the growth opportunities across all our businesses. The recruitment business has shown a sustained growth trajectory in FY25 with growth rebounding across all segments. To diversify and expand our client base, we are enhancing our go-to-market strategies and acquiring new customers. We have increased our focus on adding more GCCs and on acquiring new customers in the SMB segment and on expanding our presence in Tier-2 and Tier-3 cities and on penetrating deeper into non-IT and other sectors.
Our niche and adjacent businesses, IIM Jobs, Hirist, Naukri Gulf, Naukri Fast Forward, DoSelect, Ambitionbox and JobHai are performing well and unlocking new long-term growth opportunities. Our non-recruitment businesses continue to grow steadily and generated cash from their operations in FY25. In 99Acres, we are focused on expanding our user base, enhancing the platform, gaining market share and providing valuable content to support informed real estate decisions.
We are also developing new offerings to strengthen the secondary business further while enhancing our position in the primary new launch segment. Jeevansathi’s shift to the freemium model improved matching algorithms powered by AI and our continued efforts to monetization have driven top line growth and have succeeded in bringing the business closer to breakeven. Shiksha’s domestic business remains on a steady growth trajectory and has been profitable for a while.
Across all our businesses, we are advancing the deployment of AI and machine learning to enhance search and recommendation experiences and to develop new features and increasingly new products. Our robust cash generation and healthy cash reserves remain a significant strength enabling us to navigate market cycles effectively. We continue to evaluate the best strategies to deploy this cash to maximize shareholder returns. We are confident that these actions lay a strong foundation for the next financial year and position us well for continued progress and sustained growth in the years to come.
Thank you all. We are now happy to take any questions.
Vineet Ranjan — Senior Vice President, Investor Relations
Thank you, Hitesh. We can now start the question-and-answer session. Anand, over to you.
Questions and Answers:
Anand Prakash Bansal
Thank you, Vineet. The first question is from Sachin from Bank of America. Sachin, go ahead and ask your question.
Sachin Salgaonkar
Thank you for the opportunity. I have three questions. First question, wanted to understand on the marketing expense specifically in this quarter. We do see a massive amount of Q-o-Q increment as well as Y-o-Y improvement in marketing expense. Any color in terms of where this was spent and the general thought process on how do you intend to spend marketing in the near term?
Hitesh Oberoi
Yeah. So this higher expenditure is on account of higher expenditure both in Naukri and in 99Acres. We upped our spend in both the recruitment business and in the real estate business in Q4. Going forward, we normally take marketing calls quarter-on-quarter basis. One, competitor activity; two, our own goals for our businesses in Jeevansathi, in 99Acres like I highlighted, we seem to have gained some several points of share in the last few quarters and that’s why we’ve upped our spend a little more, so to see if we can gain even more share going forward. In Naukri, we are on IPL, which had an impact on — some impact on what we spent last quarter and will also have an impact on how much we end up spending on marketing in Q1. And in general sort of we’ve just upped the marketing a little bit to get more users on the platform and it’s been working well for us. However, we’ll take decisions on marketing quarter-on-quarter going forward. We can’t say how it will play out for the rest of the year.
Sachin Salgaonkar
Thanks, Hitesh. And just to clarify, this is not led by increased competitive intensity, but more to drive market share and growth, right?
Hitesh Oberoi
In 99Acres, like I said, we were — our marketing campaigns have been working well and we’re delivering well for the platform and therefore, we’ve upped our spend. It’s not a result of higher competitive activity. In Naukri, I think it’s just the team just felt that we’ve been out of the market. We’ve not been spending enough on marketing for a long time and we need to sort of — we’re doing so many new things and we need to sort of just be a little more visible for some more time and that’s why we are spending a little more than earlier.
Sachin Salgaonkar
And 99 appeared to be closer to breakeven and there was a thought process that in this fiscal it should be breaking even. Does it change from that perspective given the fact that you guys are spending a bit more on marketing now?
Hitesh Oberoi
So we did generate some cash last year, I mean, just 2 crores, but we did generate some cash from operations in 99Acres last year. Growth in 99Acres also accelerated in Q4, so full year growth was 17%. Q4 growth was 22%. We are — if we get good response from our marketing efforts, then we will aim to grow the business faster. But where we end up at the end of the year will ultimately depend on how much revenue growth we’re able to get. We are sensing that we are gaining share. Our supply is looking up. We are acquiring new customers. Our response is — on the platform is like growing at very high rates, rates we have not seen in the past. So we are a little — we are bullish and we are investing more at the moment. Let’s see how this plays out.
Sachin Salgaonkar
Got it. Second question, just following up in one of the opening remarks statement, you mentioned that you are optimistic on the growth. So I’m trying to understand where is the growth coming and where is that optimism in Naukri? And clearly, there are four buckets which you guys have mentioned which is, is it the tech, IT, recruitment consultants, GCCs or other sectors? Any specific area which is predominantly driving a large part of the growth?
Hitesh Oberoi
Yeah. Sorry, no. So you’re right. See, growth was very slow. In FY23, ’24, we hardly grew and we started the year — last year also on a very slow note. We grew by I think 7%, 8% in Q1. We’ve closed the year with 18% billing growth in the recruitment business. Now it’s not as if it’s a very hot hiring market. It’s a modest hiring market and you can see that in our JobSpeak numbers. I think one, it’s a better hiring market than it was perhaps a year ago, but it’s not a very hot market. Two, like I did say in my comments, some of our adjacent verticals are also doing well. So we’ve launched some new products, new offerings. Our Naukri Gulf business continues to grow at a healthy rate. The Fast Forward business continues to grow at a healthy rate. IIM jobs and Hirist have also been doing well.
Data products and some of the branding solutions that we’ve launched also received a decent response from our customers. So as a result of all these efforts and also like we’ve been investing in AI. And while we have not launched many new products, at least our algorithms are a lot better than earlier. And internally, our metrics tell us that everything is 15%, 20% better than it used to be. So I don’t know if that’s having an impact as well. So as far as the optimism for next year, we are assuming that market will continue to be reasonable. If the economy continues to grow at 6%, 6.5% per annum, if there are no major changes in the way companies hire, then hopefully this growth will sustain, but let’s see.
Sachin Salgaonkar
Got it. And last question, I just wanted to understand how should one think about steady state billings growth for the current fiscal? And I’m coming from a point of view that in the last seven to eight quarters, we saw good growth on a quarter-on-quarter basis in billings. Last quarter, as you said, it ended at 18%. Should the mid-20s be something which is very much achievable and that is what we could see in the next few quarters?
Hitesh Oberoi
It will depend on the hiring environment. It will depend on whether hiring picks up or not. There is a lot of uncertainty as we all know in the world around us. It’s very hard to predict what’s going to happen even next week, forget about what’s going to happen in the full year. We are taking it quarter by quarter. All I can say at this point in time is if the economy continues to grow at 6%, 6.5% and if there’s no major sort of incident or episode, then we will try and sustain this kind of growth rate at least.
Sachin Salgaonkar
Thank you and all the best.
Hitesh Oberoi
Yeah.
Anand Prakash Bansal
Thanks, Sachin. Next question is from Ankur Rudra from JP Morgan. Ankur, go ahead and ask your question.
Ankur Rudra
Hi, good evening. Thank you. So the first question, just again, on the recruitment segment, it’s been very strong and surprisingly strong. And thank you for the color in terms of breakup of the segments, very helpful. Now what I did notice is that there was a sharp increase in number of build customers, especially in the quarter versus prior years also, it seems to have gone up quite a bit. I also noticed that you’ve done extremely well in your tech, IT services, BPM segment, which seems a bit surprising given the uncertainty in the market that you also refer to. And the fact that the listed IT services companies are barely hiring. So what drives this difference? Are you gaining market share? Are you doing something different? Is there any change in go-to-market or any pricing changes that explains your much stronger billing rate, growth performance and also the metrics, right? And your customers also going up quite a bit.
Hitesh Oberoi
So like I did say in my comments earlier and like see, what we’ve done over the last couple of years is or maybe 18 months is, one, we’ve grown the number of offices we have, right? We have increased our focus on acquiring small and medium enterprises as customers. We have these adjacent businesses and we are trying to penetrate the market more with those offerings, whether it’s DoSelect or data products or the premium offerings we have and so on and so forth. So I think it’s a combination of three, four things. As far as IT services companies go, see, I’ve been saying this. See, what happened post COVID was that many of them ended up over hiring and they built up a big bench. And therefore, they stopped hiring for a while and they got rid of their benches. And at least now, even if they’re not growing headcount, they have to replace the people who are leaving.
And our hiring — see, our revenue is a function of attrition. So gross hiring, not necessarily net hiring. So it’s a function of what happens to attrition rates and also to headcount. So my sense is that at least IT service company, most of them are at a point where their attrition rates have stabilized, they are replacing the people who are leaving. They may not be adding a lot of headcount, but it’s like — which is why I said it is a modest sort of environment. And of course, we have the cheapest way to hire. And in a modest environment, companies have some time to hire, right? So they would ideally not want to spend on recruitment firms and so on, which are a lot more expensive way of hiring. So perhaps we are gaining some share also, hard for me to say.
Ankur Rudra
Thank you. And in terms of the current quarter, a lot of things have changed from the outlook of IT services companies given tariffs and whatnot. What has been the conversations in the quarter? How do you see current trends going in the last couple of months, whatever you can share and again, across the various segments across the GCCs and the Tech, IT services, BPM segments that you see?
Hitesh Oberoi
Unfortunately, what happens in our case is a lot of the renewals are at quarter end. So we get to know what really happens. There’s a lot of discussion, there’s a lot of negotiation and companies tend to negotiate hard. But in real, I would really only get to know in the last week of June as to how the quarter is going. But what I can say for sure is that a lot of it is very company specific. So there are some companies that are doing better than other companies. And there we don’t have a problem there. We still continue in many cases, we’re still getting a 30%, 40% jump on what we billed the client last year, right? But it’s very, very company specific.
Ankur Rudra
Okay, appreciate it. Maybe switching gears a bit on blue collar, if you can talk a bit about JobHai. How is that doing? If I just look at the headline traffic that JobHai gets versus the market leader, let’s say, like an Apna or somebody else, it seems to be a very significant gap. So what is missing? What’s the challenge in terms of getting the right product market fit here and how will you pick the engagement up?
Hitesh Oberoi
So in our view, there is not that much of a gap anymore given the entries from the numbers we track. And see, our approach in JobHai has been that this is a long-term play. This is not a market, which is going to happen in one or two years and we’ve been investing in building the product. We continue to follow a freemium model. And we believe we’ve been rapidly gaining share in terms of traffic, at least over the last few months. Our approach is a little different from the others. We are sort of right now focusing more on NCR and we want to make the model work in the NCR market.
In the NCR market, at least our team believes that we are already like up there, almost as big as the number one player, which is not Apna, which according to our team is Work India. So if the model succeeds in NCR, then we will take it to other cities a little more aggressively. So that’s the approach we’re following in JobHai. We started monetizing last year, small sums, but we did about INR1 crore in March. Full year we did INR6 crores. So baby steps, but we’re focusing more on getting the unit economics right, getting the model right and then we’ll scale.
Ankur Rudra
If it does not work properly, will you be open to a consolidation in this segment?
Hitesh Oberoi
We haven’t really thought about it. Right now, it looks like it’s working. So we’ll at least give it some more time before we start thinking consolidation.
Ankur Rudra
Just last question on A&P, you mentioned it went up because of IPL in the last quarter.
Hitesh Oberoi
Not just IPL. In general, we’ve been — because IPL is — we’ve only accounted for some IPL spend this quarter because IPL is I think March, April. So in general sort of our team feels that we should be doing a little more marketing at this stage. So that’s why the cost went up, IPL was one part.
Ankur Rudra
Sure. I mean, I’m guessing that continues for one more quarter. But how are you thinking about it going forward? And who are you marketing towards? Is it mainly for candidates and why do you think you need to have the brand presence there?
Hitesh Oberoi
Yeah. So it’s mostly marketing to job seekers. And so our team feels that there are certain segments where we need to make more inroads, right, and that will help us in the long run, certain geographies where we need to do more which will help us again in the long run, certain segments where we perhaps were missing for some time and there are lots of new job seekers who hit the market every year. So we need to be seen. So I think that’s really the reason and we are experimenting with different sort of platforms and different sort of ways and means of marketing. But this is an expense we can control anytime. So it’s a tap which can be turned off at any point in time. We’re getting decent response to the marketing efforts we are putting in. So let’s see, we’ll continue with this for some more time and then take a call.
Ankur Rudra
Appreciate it. Thank you and best luck.
Hitesh Oberoi
Yeah.
Anand Prakash Bansal
Thank you, Ankur. Next question is from Nikhil from Nuvama. Nikhil, go ahead and ask your question.
Nikhil Choudhary
Thanks for the opportunity and congratulations on very strong numbers. Hitesh, I’ll start with margin first. This quarter, the margin were obviously quite a bit lower than last quarter and we have seen promotional expense at least in FY25 was limited to Q1. This time it is now happening in Q4 as well as extending to Q1. Was there some right shifting of expense to, I mean, upfronting of expense to Q4? So let’s say the impact in Q1 would be lower than last year or is it fair to assume that at least for now, the marketing expense will be higher even going ahead?
Hitesh Oberoi
Like I said, here in marketing, we decide quarter by quarter. In 99Acres, for example, we reduced marketing expenses over some time and then we ramped it up again because we changed our marketing strategy. And the new marketing strategy started working for us and because it started working for us and the ROI was very positive, we ramped up our marketing spend and I think that will continue. So in 99Acres, we will continue to invest aggressively in marketing. And I think we’ve gained significant share in the last six months. I hope that sustains going forward.
So in Naukri, like I said, again, we’ll decide quarter on quarter. There were some goals we were chasing like we felt that we didn’t have enough CVs in some geographies. In some segments, we wanted to go after a certain type of audience. So there were some things which our team felt were important and strategic from a long-term standpoint and we wanted to sort of invest behind those efforts and it seems to be working. I mean, of course, the results from marketing will show only in subsequent quarters. You don’t get the results immediately. The returns will not be immediate. But it’s helping us meet our long-term objectives and it will continue for some time.
Nikhil Choudhary
Sure, Hitesh. Second one on employee cost. Even employee cost this quarter, I mean, bumped up by 250 basis points. Generally, we haven’t seen this kind of seasonality in Q4, even there was a decent increase in employee count as well. So I mean, is it more to do with the kind of demand we are anticipating or is it more like a disconnect we generally see between the billing growth and cost increase?
Hitesh Oberoi
So Q4 is our biggest quarter. And normally, we set aggressive targets and the variable payout is linked to billing growth, not to revenue growth, right? So part of the bump you see is because we met our targets in all our businesses. And therefore, the variable payout was a little higher than expected, because that’s more linked to billing growth than revenue growth. Number one. Number two, we are investing aggressively in AI and machine learning and generative AI. And that investments we are a little ahead of the curve on that one and it’s not cheap. And because of AI investments, we need to buy more servers, we need to hire more people and these people are not cheap, they’re expensive. But I think these investments are again strategic and very important from a long term standpoint. And hopefully, if we execute well, we will see their returns in the quarters to come.
Nikhil Choudhary
Got it.
Hitesh Oberoi
And most of these investments are being made in Naukri.
Nikhil Choudhary
Yeah. Hitesh, for last two, three quarters, you have talked about AI and gen AI in particular. Two part to it. First one, are we seeing some new start-ups coming and trying to enter, let’s say, job market? We have seen some of it getting funded recently. So are we seeing at least some niche area where we are seeing higher competition? This area is obviously growing faster than overall industry. And second part of the question is you have mentioned I think two quarters back that you’re investing in AI, but the monetization of this AI investment will be much more faster. So any quantifiable data you can tell us, maybe the product you launch or where we are in this monetization journey?
Hitesh Oberoi
See, AI continues to surprise us. AI is evolving rapidly. It’s a horizontal technology. There could be AI in everything. You can have AI in HR, you can have AI in finance, you can have AI in product offerings, you can have AI in whatever, right? It’s like that kind of technology. So as far as AI hiring start-ups go, we are not seeing any impact from any AI hiring start-up as yet. At least on our business, there’s nothing which has come to our — which is bubbling up and which we are seeing or our sales team has pointed out to us as yet. So I’m sure there’s a lot of action and I’m sure there are lots of start-ups getting funded, but there’s nothing that we are seeing on the horizon as yet, which is impacting our business.
See, as far as our AI investments go, there are multiple types of investments we are making in AI. One is leveraging — one is basic, classic machine learning. So let’s call it AI 1.0. Classic machine learning to improve our recommendation engines, to improve our search engines, to improve our matching engines. This is not the stuff that you will see on the outside, but I can tell you that in Jeevansathi and in Naukri, wherever we’ve applied the latest sort of models, we’ve seen a 15%, 20% kicker in terms of all the metrics we track, right. So whether it’s the number of acceptances. in Jeevansathi, whether it’s the number of job applications on Naukri, wherever we’ve applied some of these models, the latest models, we’ve seen a 15%, 20% kicker in our metrics and hopefully it will result in some revenue at some point in time and maybe it’s already helping.
Second is generative AI, call it AI 2.2 — 2.0 or whatever where we are trying to use generative AI to launch new features. So I’ll give you an example. We have launched an AI listing in 99Acres. Basically what happens is you record the broker’s voice and you have the listing and you can actually hear the listing in the broker’s voice. So it’s a sample that you record, but you can sort of hear the listing in the broker’s voice. Now cool feature. A lot of people, a lot of clients are upgrading to this type of listing. We have lots of use cases where we are using generative AI, for example, if there are lots of reviews on the platform, you want to give us summary, generative AI, you can help people post jobs faster. You can give us summary of a resume, all kinds of things that are possible with generative AI, which we are doing. So new features with generative AI that’s gain another area where we’re investing.
Third is brand new products. So I mentioned data products. So we have a whole suite of products which we offer to companies to help them do their talent and salary planning, right? So a lot of companies have started paying us for these offerings. Again, very early days, but this is using our proprietary data. We are piloting right now as we speak agentic AI offering, which is again let’s call AI 3.0, which is basically we’ve built a recruiter agent for companies, which can help them do what they used to do in 10 days earlier in 10 hours. And this is being beta tested in about 10 or 12 companies. And now we are moving to the commercial testing phase. Enough companies are sort of saying that we’ll help, we are happy to pay you. We have to figure out the pricing.
We’ll have to figure out how it sorts of ties up with our overall strategy. But these are examples of brand new products. Now we are investing in these products. As a result, our AI team has grown substantially over the last few years. And we are not monetizing very aggressively, but hopefully the benefits will accrue to us over a period of time. Lastly, of course, is AI for our own internal productivity to help us save costs, right? There we’ve taken baby steps. It’s not been a very big focus area for us, but slowly we are now encouraging everybody in the company also to see how they can leverage AI to become more productive and more importantly to just to do stuff faster and to become more innovative.
Nikhil Choudhary
Sure, Hitesh. Any comment on competition in this area?
Hitesh Oberoi
See, the regular competitors we have, I’m sure they’re trying to do things as well using AI. But I can tell you it’s not that easy. It’s not easy to attract the right kind of talent. It’s not easy to retain them. It’s not easy to make AI work for you. A lot of people may claim to be doing AI, but to make AI really work for you from a business standpoint is not easy.
Nikhil Choudhary
Thanks, Hitesh, and thanks for sharing additional data on segments. Appreciate it. And thanks Sanjeev and his team for sharing data regarding the kind of return you have generated since 2019. Obviously we knew about Zomato and PolicyBazar, but especially written since 2019 and other investment. Really appreciate it. Thank you.
Anand Prakash Bansal
Thank you, Nikhil. The next question is from Swapnil from JM Financial. Swapnil, go ahead and ask your question.
Swapnil Potdukhe
Hey, everyone, thanks for the opportunity. My first question is on the breakup of your recruitment segment billings. You did allude to Naukri Gulf, Fast Forward and IIM Jobs are doing well for you. But could you put it into context as to how much contribution does these businesses actually do? I remember you guys used to report Naukri India separately and the other businesses separately used to that kind of a share at one point of time. But how how that has moved could also help us understand the potential in the new businesses which is there?
Hitesh Oberoi
Did we give out these numbers?
Vineet Ranjan
We used to give product basically how much Resdex is contributing, job posting is contributing that we have stopped because of — we sell all these services as a package deals now. So they’re very difficult to attribute. So therefore we have stopped doing that, but especially for like these segments like Naukri Fast Forward or IIM Jobs, Hirist, we don’t give that separately. But obviously, Swapnil, from Hitesh’s commentary, you can refer to the growth rates these businesses are doing, but we have not been disclosing the size of the business.
Swapnil Potdukhe
I mean, the only point I’m trying to make here is that it will help us better understand the time or the opportunity which is there to concur and get a sense as how the core business is doing versus the other business. That’s why I’m coming with that question. If you can give some color going ahead, I mean, would be helpful. That’s the limited point there. The second question is with respect to your corporate cost. I think your corporate cost on a quarterly basis used to be around INR14 crores to INR15 crores till a couple of quarters back if you just go back a few quarters back, but now they have seemed to doubled close to around INR30 crores. Any particular reason there has been a substantial jump over the last couple of quarters especially?
Hitesh Oberoi
Chintan, you want to take that?
Chintan Thakkar
So I think it’s mostly like an earlier Vineet said that in Q4, we have booked a lot of management bonuses. And so it relates to either because of the improved performance in our businesses, including the investments that we have done. I think it relates to some of those type of expenses and many of them could be one time.
Swapnil Potdukhe
Okay. Got it. And the third question is with respect to your cash allocation policy, because we have a substantial bit on our balance sheet, roughly around INR4,800 crores. I understand you have increased your dividend decently this time around. But still if I were to just take out your deferred sales and the payout that you would be making this year, you will still be having a substantially large amount of cash sitting on your balance sheet. I mean, could our payout increase materially from what you are doing right now given that unless and until we have any specific requirement of it? I mean, you are also generating every year a decent amount of cash. So triangulating those things, I am just trying to understand like do we really need so much cash on the balance sheet and would it be rather distributed to the shareholders?
Chintan Thakkar
No. So look, no, you are right. The way we look at cash is that cash is very central part of our overall strategic thinking and we look at the deferred revenue, which is advance from customers. We look at what the contingency and reserves that we require in operating business is. We also continue to look at what the other opportunities of investment, whether it’s like I said it could be anything in the operating businesses like AI or job AI, we are continuing to invest, but it also — we evaluate if there are any opportunity for any inorganic activity, which need not necessarily be it’s like 100% acquisition, but we have made some strategic investments. It could be significant minority or 51% type of holding also in some of these companies. So those type of opportunities we continue to evaluate.
As you would have seen that recently we got the shareholders’ approval for another fund for about INR1000 crore. So we look at that as well. And so we are keeping some reserves for the investment activities as well. We have come out with the returns that we have been generating on the investment side as well. So that part of business also would require some funds. So we continue to keep an eye on that. So having said that every quarter, we look at what the cash balances are and we evaluate what the opportunities that looks in front of us. Keeping that in view, I think we think that we have increased the dividend as of now. We might continue even more as we go ahead. Again, it depends on the business and how we evaluate the opportunities that are in front of us.
Swapnil Potdukhe
Got it, Chintan. And just a last one on your guidance for profitability in 99Acres and Jeevansathi. I mean, you indeed allude to in some calls that you’re looking to make them profitable next 12 months or something. Obviously, you also mentioned now that there has been some rework on the marketing strategy especially in 99Acres. So any rethought as to that guidance? Are we sticking to that irrespective of the changes in our decision with regards to market shares and other things? I’m just trying to get sense as like will we stick to it or are we revising anything?
Hitesh Oberoi
See, two years ago we were losing maybe INR200 crores, INR220 crores a year in our non-recruitment businesses. And we worked very hard over the last two years to get that to. This year we generated about I think INR20 crores, INR30 crores in terms of cash from operations from all the non-recruitment businesses put together. 99Acres INR2 crores positive, Shiksha about INR25 crores, Jeevansathi maybe INR5 crores, INR7 crores, INR8 crores negative. Now see, it’s not as if we want to lose money. We would ideally want to make money in all these verticals. But if we see an opportunity to gain share and improve our long-term competitive position, then we’ll go for it, right? So in 99Acres we’ve gained some share in the last six months and we are continuing on that path.
Now if revenue growth is solid, then it’s not as if we will lose money. Yeah, we would want to make money, but if revenue growth lags by a couple of quarters, we’ll still go for share, right? In Jeevansathi, again, we’ll try to breakeven this year as well. But at the same time we would want to continue to grow at 20%, 25%. The industry is may be growing at 8%, 10% but we would want to continue to gain share even in Jeevansathi. So that’s our philosophy. Don’t want to lose a lot of money. But if we — sends an opportunity to gain share, we’ll go for it.
Swapnil Potdukhe
And any chance that there could be a possible M&As given that — I mean any thoughts around that? I mean it’s a long pending question.
Hitesh Oberoi
For that we have to go to AstroTalk.
Swapnil Potdukhe
Got it, Hitesh. All the best guys. Thanks a lot for the opportunity.
Anand Prakash Bansal
Thanks, Swapnil. Next question is from Damodaran from Equitas Capital. Damodaran, go ahead and ask your question.
Damodaran N
Thank you for the opportunity. Just one question and follow up on Jeevansathi. So I mean, Jeevansathi has regained its INR100 crore plus top line and you’re almost on the verge of breaking even and all this was achieved in the backdrop of the industry leader declining. So I mean, the question is do you think the industry is saturated and incrementally all the players will continue to fight for the same market? And if that is the case, what change do you think you will be making to your capital allocation strategy there?
Hitesh Oberoi
Yes. As far as the matrimony market is concerned, see, the category is growing at 8%, 10% per annum. We are a small player in the category. We are a number three player. Maybe it’s a INR1,000 crores category. We do about INR100 crores or maybe INR900 crores, we do about INR100 crores. We’ve done a bunch of things over the last few years to improve our sort of standing in this industry. We’ve worked very hard on — we change our model, we’ve worked very hard on the AI. We’ve cut cost. We’ve focused on a few markets. So we’ve done a host of things to get the business to where it is today. It’s not been easy for us and we are growing well now. And I think we are gaining share and we would want to continue on this path for the next couple of years and see where it takes us. The industry is what it is. I mean, it’s a three player market. Until the time it continues to be a three player market, it’s going to be very, very hard for any one player to make high margin or to grow very rapidly.
Damodaran N
Okay. So you don’t think that’s in some kind of — I mean, it’s reached some saturation point or is it in structural decline or something like that given the leader, I mean, declining last year?
Hitesh Oberoi
No, I think the leader may be declining because the leader is losing share. I mean that’s what I suspect this could be happening. I don’t know because we really don’t operate much in the South and the leader is a very strong player in the South. But I suspect if the leaders decline, it could be that — it could be they’re losing share.
Damodaran N
And they are unlikely to be losing share to us, right, Hitesh?
Hitesh Oberoi
Yeah. So they may have lost share to us in the North because we are very strong in the North. But for them the North is not a very big part of their business or was never a very big part of their business.
Damodaran N
Sure. Okay. That’s it. Thanks.
Anand Prakash Bansal
Thanks, Damodaran. Next question is from Vijit Jain from Citi. Vijit, go ahead and ask your question.
Vijit Jain
Thank you for the opportunity and congratulations on the results. My first question was actually on Resdex and I think you’ve answered part of it. But in general, I wanted to better understand the comment you made on your packages have changed and so separating your revenue mix from Resdex and others does not make sense anymore. If you could elaborate on that? Because in general, I would have thought that with all these commentaries the share of Resdex would start to meaningfully decline from here.
Hitesh Oberoi
So I think the real challenge there is that when we sell to customers, we have a rate card, let’s say, for data products, for AI racks, for branding, for a bunch of other offering, IIM jobs, Hirist, etc. And when we sell to them, it’s often like a package, okay, listen, this bundle, that bundle and then we have to allocate to different products as to — but is the customer really paying for all those offerings or is it paying for the bundle and for the value it’s deriving from the bundle is. So it’s very hard to say what’s really happening. And for that reason we have stopped sort of giving out this data. Is that correct, Vineet?
Vijit Jain
And Hitesh, also because — I mean, obviously, on the candidate side, the site attracts a lot of traffic and there is branding opportunity there as well. So is there — are there low hanging fruits there in terms of how you can improve your overall monetization outside of Resdex, just simply the share monetization of the traffic that you get, people uploading and updating resumes and whatnot. Is that something that has meaningfully changed?
Hitesh Oberoi
Yeah. So it’s not as if we go after general advertising, but we focus on recruitment advertising. And so last year, we grew our recruitment advertising business, which is what we call internally branding, okay, which is different from listings and Restdex substantially, right? Of course, on a small base, right? So we are working on some of these initiatives and we saw good traction last year. Perhaps one reason why — and the reality of life is that everybody wants to attract good talent. And now there are so many GCCs. There are so many companies fighting for this talent outside the top 50, 100 companies. Nobody really knows what the rest are all about. So everybody wants to sort of showcase themselves and tell the world how they’re different. So it’s an opportunity we see. And some of the offerings we rolled out last year seem to have been received well by customers. So let’s see if we’re able to sustain this growth momentum going forward.
Vijit Jain
Got it. Thanks, Hitesh. And my second question is to Sanjeev on the investments portfolio. So first off, thanks again to the entire team for the disclosures and I’m very mindful that Zomato, PB fintech type outcomes cannot be guided. But on a long enough timescale, what is the kind of IRR you would classify as success or base expectation?
Sanjeev Bikhchandani
See, post carry, post expense IRR of I think for the 2019, ’20 vintage fund, anything above 18%, 19% would be decent. Above 25% would be I think excellent. Now where you end up will depend on how many outliers you end up getting from that portfolio, if any, okay? Now so see, IRR is tracking where it is, but you want to understand the way IRR is measured until you actually get exits, right, or a company lists where you have a mark to market. The proxy variable is that did the company raise money from another investor at a higher valuation? If yes, then you mark it up and you work out the IRR.
Now given the private market valuations, they go up, they go down, companies do well, ostensibly evaluation, but operationally they get in trouble sometimes. Sometimes they blow up. We have seen that. IRRs can move up or down. And IRRs also have this time decay element as no doubt you guys are well aware, perhaps more than me. [Foreign Speech] even though company is doing equally well, right? [Foreign Speech]. So I would — IRRs are indicative and they should be taken somewhat with a pinch of salt. And until the companies get listed or sold or we get exits, we don’t really know [Foreign Speech].
Vijit Jain
Fair enough. No, that’s helpful, Sanjeev. Always good to have color on how you’re thinking about this. Thank you. Those were my questions.
Sanjeev Bikhchandani
We report IRR because it’s industry practice and we use this method because that’s industry practice, but essentially exits. See, I saw a good tweet the other day somewhere saying, you can’t eat IRR, you can only eat MOIC. [Foreign Speech]
Vijit Jain
Fair enough. Thank you, Sanjeev.
Anand Prakash Bansal
There is a question in the chat box from Anand. What kind of investments has the company made on AI so far and do you see it going up?
Hitesh Oberoi
Yeah. So now see, AI has become — like I said, there’s AI and everything. So there’s a central team. Now that central team team itself is very large and has grown maybe 5 or 6 times in terms of headcount over the last four or five years and of course — and then of course, we’ve added servers and lots of other sort of things to go with it. But now increasingly in every part of the business, like I said, we are encouraging everyone to either use AI tools or use generative AI. It’s not as if we have to make everything ourselves. We can also buy AI. So we are encouraging everyone to sort of do their own thing.
So even — so now marketing teams are using AI tools. You have design teams using AI tools. You have — soon you’ll have engineers use sort of AI tools. So the overall — so I would suspect that at least — that today at least 60%, 70% of what we do has some element of AI in terms of innovation and product development. So the central team which is the specialized team that may be let’s say 100 people plus minus, but there is every part of the business also now trying to see — figure out how to use AI in their department, which is separate and we’re not even counting that anywhere.
Anand Prakash Bansal
Thanks. So Vineet, that was the last live question from Vijit, Citibank and the chat box also questions are answered.
Vineet Ranjan
Yes. So I guess yeah, thank you everyone. I guess on behalf of Info Edge, we can conclude this call. Thank you for joining.
Hitesh Oberoi
Thank you everyone. Have a great evening.
Anand Prakash Bansal
Thank you everyone.
Sanjeev Bikhchandani
Thank you and bye-bye.