Info Edge: On the Job

WE HAVE ALWAYS BELIEVED you should focus on the operation, create value for customers, create value for users, give them reasons to engage with you more and if you do it better than your competitors, you will be successful,” says Hitesh Oberoi, co-promoter, MD & CEO, Info Edge (India).

Long before the start-up culture came into vogue, the Sanjeev Bikhchandani-founded firm took the lead in experimenting with the world of digital, helming and nurturing a spate of Internet businesses over the years. In fact, in a space where most firms are struggling to monetise, thanks to the high cash-burning nature of consumer Internet businesses, Info Edge is one of the few sectoral companies making money. The company’s total income shot up 468% year-on-year to ₹15,399 crore in FY22, while net income rose 48% to ₹1,589 crore, and profit after tax grew 801% to ₹12,760 crore, making it one of the biggest gainers on Fortune 500 India 2022 list (rising 288 ranks in the year). The surge in profits was driven by exceptional income booked majorly from mark-to-market gain on the date of listing of Zomato, an investee company. “We have been growing faster than most start-ups. We have gained share in almost all our verticals. We are sitting on ₹3,500 crore. The Naukri business is generating around ₹1,000 crore a year,” says Oberoi.

Much of the company’s FY22 growth is due to the Covid-led adoption of digitisation: “Every company wanted to go digital, hire digital and IT talent. That led to a surge in demand for IT professionals. On job portal Naukri.com, which generates the bulk of the business for Info Edge, IT-related jobs make up around 30% of the listings, while as much as 50% of the demand is for IT professionals. “Directly we get around 28-30% of our revenues from IT companies, and 25-26% from recruitment firms, half of whom hire for IT companies. So, around 50-55% of revenues are co-related to what happens in the IT sector. We don’t make much revenue from start-ups,” says Oberoi. The bulk of Naukri’s revenues come from enterprise subscriptions — companies pay the online recruitment platform for accessing the database of job seekers.

But with a global recession looming large, Info Edge is bracing for a brief slowdown in IT hiring as firms turn conservative amid macroheadwinds. “There is trouble brewing in the U.S. and the U.K. But in the past, in the long run, whenever there has been a recession in the U.S., more jobs moved back to India as companies cut costs in the U.S. by laying off people. India is always a cheaper place to hire. In the short term, companies cut costs but in the mid to long term, they actually outsource more jobs to India,” says Oberoi.

Besides, non-IT hiring has picked up after the Covid-induced hiatus. Demand for professionals in industries, including travel, tourism, hospitality, telecom, banking and insurance has surged. In fact, the demand in these areas is more than the past year, claims Oberoi. “But, for how long we will see this growth we don’t know. It will also depend on the rate at which the Indian economy continues to grow after a while,” he adds.

“Where we are investing now is this whole business of transforming Naukri into a career platform. Right now it is a job board. You get hired when you put your CV, but we don’t help you get hired. We don’t help you upskill or figure out where the jobs are, what jobs you should be aspiring for or what your salaries should be. Our investment in Ambition Box and Coding Ninja will help us transform Naukri much more than a job board. It will become a career platform,” says Oberoi. Naukri.com currently enables four million jobs a year.

Acquisitions form another big part of Info Edge’s growth plans. The idea, says Oberoi, is to expand the company’s suite of offerings and get a higher share of the wallet from customers. The firm has made a series of acquisitions in the past few years, including online recruitment platform for middle and senior management positions iimjobs.com, SaaS-based hiring platform Zwayam, skill assessment platform DoSelect and AmbitionBox, a tech platform that helps job seekers find adequate information about companies ranging from reviews to salary structure. The types of acquisitions, however, vary, Oberoi had said during the company’s Q1FY23 earnings call. “There are two or three types of strategic investments we are making. One is outright acquisition. Then there are companies where we are investors, but we don’t run the operation, like Univariety, NoPaperForms, Greythr. The other is investments via which the firm owns a majority stake in companies.” Some of the acquisitions, particularly the recent 76% majority stake in dating app Aisle, are intended to give it a foothold in emerging hot sectors.

After all, dating apps that are spreading wings across the country may soon emerge as stiff competition to matrimonial apps. “The dating market is a fast-growing market,” says Oberoi. Info Edge’s matrimonial business Jeevansathi was struggling before the company implemented a fresh strategy to give it a head-start. “Jeevansathi was the No. 3 player, but we were losing tons of money. Many people wanted to know if we have shut down our business... We changed our strategy. We made the chats free on Jeevansathi, which has helped us gain traffic and user share. Our burn is likely to reduce going forward,” says Oberoi. He expects the business to break even in two-three years.

Info Edge has also been one of the early investors in listed unicorns Zomato and Policybazaar parent PB Fintech. It also runs a fund to support early stage start-ups in partnership with Temasek subsidiary MacRitchie Investment, and has made 44 investments so far. The company has structured the fund into three AIFs (alternate investment funds) with a target corpus of $425 million. The plan is to support investee companies.

And how does it see the funding winter? “We have been doing this for 20 years. Every few years, there are ups and downs. Companies which continue to focus on their customers and users do well in the end. We have been listed for over 15 years, the market shows you all prices. But you have to continue to do what you are good at,” says Oberoi.