The team at the Rs 218 crore Info Edge is going to have to work harder than ever. With the economy slowing down, so are recruitments. And that has impacted the company’s job portal naukri.com, which fetches just under 90 per cent of the firm’s top line. Revenues are growing at a slower pace---30 per cent in the six months to September 2008, compared with 57 per cent for 2007-08. With the job market rather dull, Morgan Stanley believes revenues could dip marginally in 2009-10. That’s possibly why the stock has lost 71 per cent since the start of the year as compared with a 50 per cent decline in the Sensex.
Since the IT space brings in a fourth of naukri.com’s revenue, any pick up in revenues would have to be driven by more hiring by tech firms. Unfortunately, in the current environment, there’s relatively less hiring in other industries too. So while more people may be looking for jobs, naukri.com doesn’t benefit unless companies increase recruitments.
In 2007-08, naukri.com saw a 23 per cent increase in its clientele, taking the total number to around 18,500. The growth in 2008-09, according to Morgan Stanley, is expected to be just about 3 per cent. Info Edge’s other two portals jeevansaathi.com and 99 acres.com are still in an investment phase and continue to incur losses. As such, the company’s net profit which grew just 7 per cent to Rs 29 crore in the first half of 2008-09, may grow at a slower pace in the second half. In 2007-08, net profits had risen106 per cent to Rs 55 crore.