Info Edge (INFOE) Q4FY25 Earnings Update: Steady Growth Amid Margin Pressure

Info Edge (INFOE), a prominent company in the recruitment and real estate digital space, recently announced its Q4FY25 earnings. The company delivered a decent revenue performance but faced some margin pressures. Let’s take a closer look at Info Edge’s Q4FY25 results and what they mean going forward.

What Went Well: Positives in Q4FY25

Info Edge’s Q4FY25 performance showed steady revenue growth and some positive signals in the job market, especially the IT sector:

• The company posted revenue growth of 13.0% year-on-year, aligning well with expectations.

• The recruitment segment revenue also grew by 13.0%, showing steady demand.

• Revenues from 99acres, the real estate platform, increased by 14.3% YoY, reflecting solid growth.

• Naukri billings grew by 18.4% YoY, indicating gradual recovery in IT hiring.

These figures indicate steady progress as demand recovers in both IT and non-IT segments.

Challenges: Margin Pressures and Investments

Despite revenue growth, Info Edge faced some challenges on the profitability front:

• The Profit Before Tax (PBT) margin for Naukri dropped to 54.5%, which is 288 basis points lower compared to the same quarter last year, and 449 basis points lower compared to the previous quarter.

• This decline is attributed to higher investments in marketing, which may continue to impact margins in the near term.

• There was a noted flip-flop in 99acres revenue, likely due to increased investments aimed at growth.

So, while revenue is stable or improving, profitability margins—especially for Naukri—are under pressure due to increased spending on marketing and expansion.

Analyst Perspective: Maintaining ADD Rating with Slight Trim in EBITDA Estimates

The outlook includes:

• Q4FY25 showed decent revenue performance but with some margin pressure.

• There is gradual demand recovery in IT and non-IT segments for recruitment.

• The flip-flop in 99acres with possibly higher investments suggests focus on long-term expansion.

• Steady revenue performance is expected with somewhat weaker margins.

• While FY26-27 revenue estimates remain broadly unchanged, EBITDA estimates have been trimmed by 5-7%.

The fair value is set at ₹1,625, slightly adjusted due to stock splits.

Visualising Info Edge’s Q4FY25 Performance

What This Means for Investors

Info Edge demonstrates consistent top-line growth, supported by demand recovery in recruitment segments. The investments in marketing and platform development have affected profitability margins, particularly at Naukri and 99acres. While some short-term margin pressure exists, the outlook for steady revenue growth continues.

Investors should consider the balance between steady revenue performance and near-term margin challenges, keeping in mind the revised EBITDA estimates and target price.