Here is why Naukri parent Info Edge’s stock went up 23% in the last one month

• Shares of Info Edge (India) Limited reached ₹6,692 at 11:56 a.m. on September 8.
• The development coincides with ICICI Securities issuing a buy call on Info Edge (India) with a target price of ₹8,040.
• The analyst expects increase in hiring, real estate rentals and wedding trends to fill Info Edge’s pockets in the near term.

Sanjeev Bikhchandani-led Info Edge’s shares reached ₹6,692 at 11:56 a.m. This represents an increase of ₹509 in value compared to the previous close of ₹6,183 on September 7.

Over the last one month, Info Edge’s share price has increased by 23%. Each share was valued at ₹5,368 on August 9 compared to ₹6,692 at 11:56 a.m.

The development comes as ICICI Securities has issued a buy call on Info Edge (India) with a target price of ₹8,040 today. The analyst expects the share to reach the target price in a span of one year.

The analyst had issued a similar buy call in June with a target price of ₹6,300. ICICI Securities have now revised the target as Info Edge shares have crossed the said target.

In its latest report on Info Edge, ICICI Securities has elaborated on the strong points that would lead the company’s stock price to increase.

The broking house has also revised the estimated valuations of Info Edge and its subsidiaries. “We value Naukri at 75x [times] financial year 2023 estimates earnings per share. We value 99 Acres and Jeevansathi [Info Edge’s subsidiaries] each at 20x FY 2023 estimated sales. As elaborated in our report, our 1-year forward valuation of Zomato [a portfolio company of Info Edge] stands at $22 billion.”

Meanwhile, Info Edge’s portfolio companies — Zomato and Info Edge — are also moving away from the ‘startup’ tag to a maturity stage. Zomato has already hit the public market and bought over ₹15,000 crore in return for Info Edge, PolicyBazaar has filed preliminary papers to go public soon.

Further Info Edge invested in another initial public offering (IPO)-bound company ixigo in July.

Key points working in favour of Info Edge

Strong hiring could benefit Naukri.com

Trends in other markets like the US, which publish job market data periodically, hint towards a significant demand-supply mismatch when it comes to hiring. In India, entrepreneurship, preference to work in startups and flexibility of workplace are going to be biggest drivers of this demand-supply mismatch in hiring, as per ICICI Securities. This is likely to benefit job search platforms like Naukri.com for the next 12-18 months.

Vibrant job market will push more people to move out

ICICI Securities in its latest report noted that several new trends have emerged in the proptech segment — low interest rate, strong pipeline, print to online shift in advertising, recent direct-to-customer (D2C) approach taken by builders to drive traction in online real estate classifieds.

The brokerage firm predicted the spike in paid listing going ahead, which will enable Info Edge-owned 99acre.com’s EBITDA [earnings before interest, taxes, depreciation, and amortisation] profitability to exceed the street estimates.

ICICI Securities, however, also noted that competitive intensity is one of the key reasons for the suboptimal profitability in this segment for Info Edge. Besides this, the decline of funding in the real estate segment is also pushing Info Edge’s competition to reduce cash burn. “Nevertheless, the full stack aspirations of competitors like Square Yards is a key risk to watch out for,” the report added.

Matchmaking is back on the table

Easing of lockdown restrictions and best-in-a-decade job security will encourage more people to look for their partners on matchmaking platforms. ICICI Securities is anticipating a sharp increase in paid listings in the near term to also drive EBITDA profitability, in FY23. This will be a surprise to the current street expectation, the ICICI Securities added.

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