Naukri – Demand buoyant, 99Acres Muted – Will Zomato Breakeven ?

Naukri Platform Demand Buoyant Naukri.Com is witnessing increased adoption of newer features by its corporate clients. 350 customers have gone live on Referral hiring system. Similarly, INFOE has sold cloud based Careers Site manager (CSM) to above 1,600 clients. Average realization in CSM has also doubled, indicating pricing power. The company expects growth rate to sustain in FY17.

The Management played down potential risk from lower hiring intensity from IT Services companies, especially at the bottom of the pyramid. The Company sees trend of experienced hires by IT companies as positive for Naukri as it is not involved in campus recruitment. Further, with only 25% of recruitment by IT companies’ currently through Naukri, INFOE sees significant headroom for growth.

99Acres has dominant market share (50%+) in National Capital Region (NCR) and Mumbai. Sluggish real-estate market in NCR has resulted in muted FY16 growth (+10%) in FY16 even as Mumbai/Pune regions are growing at 35-40%. The company however expects the worst in NCR to be over next year in broader terms of the real estate cycle and see moderate recovery. Competitive intensity has abated in past few quarters which has resulted in lower burn rate for 99acres.

Management believes that only large developers invest on print-media. C.50% of inquiries for properties now come from internet – including Google, Facebook etc. The management therefore is confident that shift in advertising dollars from offline to online is inevitable.

Zomato’s FY16 revenues grew 91% YoY to Rs 1.85bn while the EBITDA losses expanded to Rs 4.4bn. In FY17, Zomato is likely to achieve its current revenue-rate of Rs3bn (+60% YoY), as per the management. Importantly, the burn-rate is now down to less than USD 2mn/month. This is attributable to pull-back in investments (and headcount
reduction) in US/UK where Zomato was not the market leader. With c.USD 250mn of incremental revenues coming each month, Zomato could potentially break-even in FY17.

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