Higher advertising costs limit Q3 margins at Info Edge India

Info Edge India, which runs websites like jeevansathi.com and naukri.com, reported a 22% year-on-year increase in revenue and but the top line remained flattish on a sequential basis. Margins suffered due to higher advertising costs.

Total billing during the third quarter increased 19% on year to Rs 228.3 cr, the company said. Net sales rose 22% to Rs 227.2 crore.

Both net profit and operating profit jumped when compared to the same quarter last year, were down on a sequential basis due to higher employee and marketing costs.

Profit before exceptional items and tax slipped to Rs 95.6 cr in the October-December quarter from Rs 109.6 cr in the preceding three months, while net profit fell to Rs 53.3 cr from Rs 79.0 cr in the same period.

However, on a year-on-year basis, profit before exceptional items and tax was up by 45% and net profit was up by 13%. The year-ago quarter had been hit by poor revenue. EBITDA of Rs 100.8 crore was higher by 40% over last year.

The company spent Rs 25.5 cr on advertising and promotions during the three months, up from Rs 17.6 cr in the preceding three months and Rs 18.4 cr in the year-ago period.

All three divisions of the company — recruitment, real estate and matrimonial — showed revenue growth compared to last year, but matrimonial revenues declined on a sequential basis.

Losses at the real estate and matrimonial businesses narrowed when compared to last year, but were higher when compared to the previous quarter, likely due to the higher advertising costs.

“On a very positive development, 99acres has shown remarkable recovery with 54% growth in billings for the quarter, year on year,” said finance head Chintan Thakkar.

“Recruitment business continues to show steady growth of Billings at 13% for the quarter, YoY. Overall Billings have grown by 19% YoY and the Operating EBITDA have grown by 68%.”