Info Edge sees 99acres operating leverage as Naukri hiring recovery remains uneven

Investment View and Valuation

Motilal Oswal Financial Services retained a Neutral view on Info Edge (India) Ltd. in its August 10, 2026 result update. The broker highlighted improving execution across Recruitment and 99acres, but noted that the broader hiring recovery remains uneven and valuations already capture much of the near-term improvement.

The broker’s target price is Rs 1,250, based on a sum-of-the-parts valuation, compared with the CMP of Rs 1,282.

1QFY27 Financial Performance

Info Edge reported standalone revenue of Rs 824.5 crore in 1QFY27, up 12 per cent year on year and 2.4 per cent quarter on quarter. Revenue was broadly in line with Motilal Oswal’s estimate of about Rs 810 crore. Total billings increased 14.4 per cent year on year to Rs 740 crore.

EBITDA margin improved to 44.0 per cent, above the broker’s 41.5 per cent forecast, aided by lower advertising and employee costs and operating leverage. Adjusted PAT rose 22.3 per cent year on year to Rs 311.4 crore, exceeding the estimate of Rs 294.5 crore.

For 2QFY27, Motilal Oswal forecasts year-on-year growth of 14.0 per cent in revenue, 19.2 per cent in EBITDA and 14.5 per cent in adjusted PAT.

Recruitment Growth Remains Uneven

Recruitment, including Naukri, was the principal growth driver. Recruitment billings rose more than 17 per cent year on year, or about 15 per cent after adjusting for clients renewing early or deferring renewals, while revenue grew 13 per cent.

Growth broadened across IT/BPM, global capability centres and non-IT sectors. However, the mid-market, which represents a meaningful part of Info Edge’s revenue base, and the IT hiring environment remain soft. Consultant billings were largely flat. Motilal Oswal models Recruitment revenue growth of about 13.5 per cent for FY27E and does not see evidence yet of a broad-based hiring recovery.

Newer Products and AI Adoption

Around one-third of Recruitment growth was generated by volume, pricing and newer products, including AI Recruiter, Talent Pulse and employer branding. Premium CV views are growing more than 25 per cent, while around 700 customers paid for AR during June and July.

Motilal Oswal considers the early adoption encouraging, but says a renewal cycle is needed to evaluate retention and incremental monetisation. Management does not view artificial intelligence as a disintermediation risk for Recruitment, Real Estate or Matchmaking because of proprietary two-sided data and two decades of domain knowledge. Management considers Shiksha more structurally exposed because of its dependence on third-party traffic.

99acres Nears Breakeven

99acres billings and revenue both grew 17 per cent year on year. Its PBT loss narrowed to about Rs 2 crore from an adjusted loss of about Rs 17 crore in 4QFY26, bringing the business close to breakeven.

Traffic, listings and enquiries continued to rise, with a strong web and app share. Management guided that 99acres should turn cash generative in FY27.

Motilal Oswal expects lower competitive intensity following the Housing.com acquisition, disciplined marketing expenditure, a leaner cost base and completed sales restructuring to support further operating leverage. However, monetisation still trails gains in traffic and supply.

Earnings Estimates and Valuation Framework

Motilal Oswal raised its FY27E and FY28E revenue estimates by 3.9 per cent and 5.8 per cent, respectively. Adjusted PAT estimates were increased by 4.0 per cent and 4.7 per cent, while EBITDA-margin estimates were raised to 42.0 per cent and 41.9 per cent, respectively.

The broker’s SoTP valuation uses DCF for Naukri and 99acres. It assumes a 9.0 per cent FY27–34 revenue CAGR and a 10 per cent EBIT CAGR for Naukri, and a 14 per cent revenue CAGR for 99acres. An 11.0 per cent WACC and 4.5 per cent terminal growth rate are applied to both businesses.

The valuation also incorporates the market values of Info Edge’s investments in Zomato and Policybazaar, a 10x FY27E EV/sales multiple for Jeevansathi and other businesses, other investees and cash.

Key Constraints

• Recruitment demand remains uneven, with the mid-market and IT hiring environment still soft.
• Recruitment growth is expected to remain moderate, with FY27E revenue growth modelled at about 13.5 per cent.
• Sustained monetisation and retention of newer offerings have not yet been established, as a renewal cycle is needed to assess adoption.
• Margin expansion remains dependent on revenue growth.
• Although 99acres is nearing breakeven, monetisation continues to trail gains in traffic and supply.