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Info Edge India Ltd (“IEIL” or “The Company”)

1) Business:

IEIL is a internet based company which provides information technology services. The Company
is involved in online classifieds business. Segments include:

a) Recruitment Solutions: Online recruitment

classifieds i.e www.naukri.com, is a market
leader in the Indian e-recruitment
space. www.naukrigulf.com, is a job site
focused at the Middle East market, offline
executive search
(www.quadranglesearch.com) and a fresher
hiring site (www.firstnaukri.com). Additionally,
IEIL provides job seekers value added
services (Naukri Fast Forward) such as
resume writing.

b) Real Estate: Online real estate

classifieds, www.99acres.com, is India’s
leading property marketplace covering almost
all the major cities and a large number of
agents and developers.

c) Online Restaurant Discovery: Online food

guide portal zomato.com

d) Matrimony: Online matrimony classifieds, www.jeevansathi.com, is among the top

three in India’s online matrimonial space, and has offline Jeevansathi Match Points and
franchisees.

e) Education: Online education classifieds, www.shiksha.com, is the leading and an easy

gateway for students to achieve their goals.
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The Company has also made investments in the following Companies. Following are the
subsidiaries of IEIL:

 Naukri Internet Services Private Limited and Jeevansathi Internet Services Private Limited,
which own internet domain names and related trademarks;

 Allcheckdeals India Private Limited which provides brokerage services in the real estate
sector in India;

 Info Edge (India) Mauritius Limited primarily to make overseas investments of the company
(under liquidation);

 Applect Learning Systems Private Limited which is engaged in business of kindergarten to

class12 (K-12) assignment and tuitions through its online portal Meritnation.com;

 Zomato Media Private Limited, which operates an online food guide portal zomato.com; and

 MakeSense Technologies Private Limited, owner of proprietary software for semantic search
which augments search capabilities for both recruiters and job seekers, principally on
naukri.com.

Additionally investments made by IEIL in other companies may have been routed through some
of these subsidiaries.

During FY 2019, the Company has added four companies to the portfolio:

1. www.shoekonnect.com managed by Bizcrum Infotech Private Limited;

2. www.medcords.com managed by Medcords Healthcare Solutions Private Limited;

3. www.printo.in managed by Printo Document Services Private Limited;

4. www.shopkirana.com managed by Shop Kirana E Trading Private Limited;

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The total investment into these four companies is INR 420 million.

While adopting a cautious approach to these investments, the Company is aware of the risks and
the continuous requirement to fund losses during the initial phase of development of these
businesses. It recognizes the importance of fostering creativity, new ideation and technology
development to essentially incubate, develop and grow such new business models in the internet
based services industry. Most of the investee companies are in the initial phase of development
and are positioned for long term value creation. Thus, at present, most of them generate losses
and, hence, the consolidated financial performance gets adversely affected.

2) Strategy:

 To revitalize the brands for the next phase of growth and competition. IEIL does that by
ploughing back its some of its revenue growth to consolidate the brand positioning and gain
traffic share.

 Long term investments to secure the future business, grow market share and revenue
generation capabilities.

 In short, IEIL’s business strategy is based on the following:

 Value System

 Focus on Financial Strength

 Emphasis on People Development

 Customer Centric Approach

3) Outlook:

 The Company is keen on launching new products and improvise the present ones in order to
grow in FY2020 and onwards.While revenue growth is expected (currently at 20%), there will
be capital investments in future on brand development, marketing and product technology in
order to increase the revenue growth and sustain in the market. With continuous
improvement and competitions in the market, IEIL is well positioned to focus on
maintaining/improving its market share across the brands.

 The online classified industry has seen a rapid growth in the light of new categories/offerings,
evolving business models, entry of multiple players and changing consumer behavior.

 The digital economy in India is on an accelerated growth trajectory and it has shown a
decent growth in the last couple of years and is projected to grow over USD 1.2 billion by
2020. As the digital economy continues to expand, IEIL finds itself well positioned to
leverage many of the opportunities arising out of a more digitally connected Indian economy.
IEIL has the capability to do so because of its deep knowledge base of and on-ground
experience with its customers and due to extensive investment made by it in technology and
the best-in-class tech-savy people. The Company will continue to leverage its leading
positions across its business segments.
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 Naukri.com has established clear leadership position in India which is the key to its success
and growth. The Company continues to make investments into product innovation,
engineering, brand support, sales network, servicing back office and hiring superior talent.

 99acres.com has achieved its leadership position through continued investments in product
aesthetics, data quality and marketing which has ensured quality and innovation driving
customer retention and growth. The sectoral uncertainty that arose with the introduction of
demonetization, GST and RERA is gradually reducing. With gradual recovery in the real
estate segment, future seems to hold good which may report high growth and value creation.
IEIL expects to invest more in this business.

 Jeevansathi.com is expected to continue on their gradual growth path with investments

being made on brand development.

 Shiksha.com is a small and growing business but is gaining traction and becoming profitable.

 Overall, the Company expects the economic conditions to improve in FY2020 and onwards
and expects to well position in the market to leverage market opportunities and grow.

 It will continue to explore opportunities to make strategic investments in investee companies

while maintaining adequate cash in its reserves to preserve and protect existing brands
under control and also protect itself in the future.

4) Vision: With increased interest usage, IEIL’s vision is to create World Class online platforms
that transform lives to easy, convenient and time saving by continued modern, transformed
and innovative ways.

5) Industry Overview:

 Recruitment Sector: The Indian HR solutions market is highly fragmented with 70% of the
market being dominated by unorganized players. With formalization, about half the market is
expected to be driven by organized players by 2025. Currently, ~3.3 million associates are
handled by organized players which is expected to increase to ~6.1 million associates by the
year 2021. The HR solutions market is expected to reach INR 1,08,749 crore by 2021
growing at a CAGR of 16.8%. The growth in staffing will be driven by retail, banking,
software, automotive, e-commerce, manufacturing, pharma and health care in the upcoming
year. The surge in overall employment in India will be based on increased focus on job
creation backed by strong economic fundamentals.

 Education Sector: By 2030, Global Education and Training Expenditure is set to reach at
least $ 10 trillion. India holds an important place in the global education industry. India has
one of the largest networks of higher education institutions in the world. However, there is
still a lot of potential for further development in the education system.Moreover, the aim of
the Government is to raise its current gross enrolment ratio to 30 per cent by 2020 which will
boost the growth of the distance education in India.India has the world’s largest population of
about 500 million in the age bracket of 5-24 years and this provides a great opportunity for
the education sector. The education sector in India is estimated at US$ 91.7 billion in FY18
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and is expected to reach US$ 101.1 billion in FY19.Number of colleges and universities in
India reached 39,050 and 903, respectively in 2017-18. India had 36.64 million students
enrolled in higher education in 2017-18. Gross Enrolment Ratio in higher education reached
25.8 per cent in 2017-18.The country has become the second largest market for e-learning
after the US. The sector is expected to reach US$ 1.96 billion by 2021 with around 9.5
million users.

 Real Estate Sector: Real estate sector in India is expected to reach US$ 1 trillion by 2030.
By 2025, it will contribute 13 per cent of the country’s GDP. Real Estate stock in India is
expected to reach 3.7 million square feet in 2019, with addition of 200 million square feet
during the year. Emergence of nuclear families, rapid urbanization and rising household
income are likely to remain the key drivers for growth in all spheres of real estate, including
residential, commercial and retail. Rapid urbanization in the country is pushing the growth of
real estate. More than 70 per cent of India’s GDP will be contributed by the urban areas by
2020. Indian real estate increased by 19.5 per cent CAGR from 2017 to 2028.

 Matrimony Industry: Matrimonial websites have redefined the matchmaking experience on

the internet. As per reports, online matrimony business sees a growth of 25%-30% every
year. It is increasingly becoming a better option to search for perfect mates for the new
generation.
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6) Snapshot of Annual/Semi Annual Financials of the Company

Standalone Particulars (In Million) FY2018 FY2019 H1FY2019 H1FY2020

Sales 9,155 10,983 5,245 6,294
Growth % NA 20% NA 20%
EBITDA 2,973 3,413 1,668 2,003
EBITDA Margin % 32% 31% 32% 32%
Interest 0.84 0.84 0 35
Depn & Amortization 215 204 105 199
PAT 1,824 2,817 1,411 760
PAT Margin % 20% 26% 27% 12%

Cash and Bank Balances 1,458 1,052 3,034 753

Current Investments 11,456 3,400 6,456 645
Equity Share Capital 21,074 23,239 22,341 23,802
Total Borrowings 3 4 6 2
Total Assets 26,278 29,410 27,586 30,699

Cash Flow from Operating Activities 3,067 2,956 1,122 1,421

Cash Flow from Investing Activities -2,042 -2,233 402 -1,061
Cash Flow from Financing Activities -757 -781 -191 -416
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7) Financial Ratios:

Particulars-Standalone (INR Mn) FY2018 FY2019 H1FY2020*

Current Asset 14,670 15,569 12,320
Current Liabilities 5,159 6,125 6,270
Current Ratio 2.84 2.54 1.96

Inventory - - -
Quick Ratio 2.84 2.54 1.96

Cash On hand 740 683 627

Bank Balances 718 370 127
Total 1,458 1,052 753
Cash Position Ratio 0.28 0.17 0.12

Inventory to GWC - - -

Long Term Debt 7 8 7

Networth 21,074 23,239 23,802
Debt/Equity Ratio 0.00 0.00 0.00

Total Debt 3 4 2
Capital Gearing Ratio 0.00 0.00 0.00

Net Fixed Assets 506 500 442

FA/Networth 0.02 0.02 0.02

PBDIT-Tax (Excl Other Income) 1,982 2,244 1,348

Interest 1 1 35
Annual Installment(ST) 5 5 5
DSCR 361.11 417.92 34.38

GFA 1,083 1,251 1,334

Acc Depn 576 751 950
Net FA 506 500 384
LT Secured Liabilities - - -
FA Coverage Ratio NM NM NM

Net Sales 9,155 10,983 6,294

Average Total Assets 26,278 27,844 30,054
Total Assets Turnover 0.35 0.39 0.21

Average Fixed Assets 506 503 442

Fixed Assets Turnover 18.08 21.83 14.24
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COGS 0 0 0
Average Inventory 0 0 0
Inventory turnover NM NM NM

Inventory Holding Period (Days) NM NM NM

Net Credit Sales 9,155 10,983 6,294

Average Debtors 44 52 64
Debtors Turnover 208 211 196

Collection Period(In days) 1.76 1.73 3.73

Net Credit Purchases 1,307 1,978 1,179

Average Creditors 649 593 -
Creditors Turnover Ratio 2 3 NM

Payment Period (In Days) 181 109 NM

EBITDA 2,973 3,413 2,003

Total Sales 9,155 10,983 6,294
Operating Profit Ratio 32% 31% 32%

PAT 1,824 2,817 760

Pref Dividend 803 808 294
Average Networth 21,074 23,239 23,520
ROE 5% 9% 4%

PBIT 2,814 3,986 1,415

Average Capital Employed 21,082 22,165 23,809
ROCE 13% 18% 12%

No.of Equity Shares 122 122 122

Book Value per share 173 190 195

Earnings per share 8.39 16.47 7.61

Market Price 1,231 1,796 1,836

Price Earnings Ratio 146.70 109.10 241.16

Dividend paid 803 808 294

Dividend Payout Ratio 44% 29% 39%
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8) Comments of Financials and Financial Ratios:

FY2019 Comments:

 Performance: IEIL has posted the growth of 20% with EBITDA margins in the range of 30-
32%. Being a negligible debt, the Company has posted strong financial metrics with strong
Networth and healthy Cash and Cash Equivalents.

 Profitability (Incl Returns):IEIL has posted healthy ROA, ROE and ROCE backed by Sales
Growth of 20%, EBITDA margins in the range of 30-32% and PAT Margins in the range of
25-27%. Since IEIL is a growing Company, IEIL is expected to increase its PAT in value
terms thus increasing its ROA and ROE in future. Company has posted healthy Book Value
Per Share. P/E ratio of the Company has outperformed its industry P/E. Owing to healthy
profitability, the Company is regular in paying Dividends to its Shareholders.

 Solvency: Since the Company has negligible Debt, DSCR ratio of the Company is strong
enough to sustain in the market. Also, the nature of the business is such that IEIL would not
require much of the debt to grow in the future.

 Leverage: With negligible debt and rising EBITDA and Networth (owing to plough back of
profits), Leverage and Gearing ratios stands almost NIL. Thus, shows that IEIL is a Debt free
company. It is to be noted that the Company takes loans in between the year if need be but
repays at the end of the year.

 Resource Allocation: Current/Quick Ratio stands more than 2x thus shows that the
Company manages its Working Capital efficiently. Debtors and Creditors Turnover Ratio
alongwith Collection and Payment Period is managed effectively.

H1FY2019 Comments: In line with FY2019, the Company has posted strong financial
metrics to sustain in the market.

Comparison with Industry: While comparing the same, IEIL has outperformed the industry. The
Company has posted Recruitment revenue growth, Matrimonial revenue growth and Real estate
revenue growth to 17%, 5% and 42% respectively. However, Industry Recruitment grew at ~16%
thus outperforming the same. The Company is confident to continue to make profits in the other
sectors as Government is taking adequate steps to grow the Real Estate and Education Sector.
Thus, IEIL is confident to make healthy profits by innovating and transforming the use of
Information Technology Business.
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9) CSR Activities:

 IEIL, through its CSR activities, will

continue to enhance value creation in the
society through services, conduct and
initiatives, so as to promote sustained
growth for the society.

 Adjacent Pie charts show the geographic

allocation of the funds through its CSR
activities.

 The CSR Committee is formed to monitor,

frame and execute the CSR activities.

10) Environmental Impact of the Company’s Operations:

 The Company has implemented the “Green Initiative” to enable the electronic delivery of
notice/documents/annual reports to the Shareholders. The electronic copies are sent to all
the members to their registered email addresses.

 The Company has started providing e-voting facility to all the members to enable them cast
their vote electronically.

 Green Initiative will help the environment by reducing paper consumption and preserve the
reserves of the environment.

 The Company has always been striving towards imbibing green sustainable products,
processes and practices. It continuously endeavors to reduce the environmental impacts of
its own operations. It focuses on improving energy efficiency, use of renewable energy,
procurement of greener products and waste recycling. The Company aims to reduce the
impact on the environment by identifying ways to optimize resource consumption in its
operations although the very nature of the businesses of the Company has limited impact on
environment.

 To ensure optimal resource consumption, the Company has incorporated environment

friendly installations such as energy efficient equipment including:

1) Replacement of conventional lights to LED lights in the offices across all the locations.

2) The Company uses Automated Energy Monitoring & Control Product named as “Zenatix”,
which enables monitor, configuration and control of the electrical devices of the
organization.

3) The Company uses star rated and energy efficient ACs and Diesel Gensets.

4) Automatic server and desktop shutdown, to reduce consumption of energy, in addition to

constant mailers to remind & encourage energy saving.
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5) Initiatives to reduce usage of virgin paper and consumption and promotion of recycle.

6) Responsible e-waste disposal.

7) Usage of Video Conferences, Video/ Audio chatting to reduce emissions as a result of

travel.

8) Company provides shuttle services and encourages car pool to save fuel & reduce
pollution, thereby protecting the environment.

11) Innovation and R&D Activities:

 To remain ahead of competition in an ever-changing volatile market, the company’s recent

focus has been to develop new and updated apps for mobile phones for its classified online
businesses to help customers stay on track with their search and discovery processes. The
back end APIs and services infrastructure have been re-architected and main components
simplified to support speed to market in launching new features for diverse devices and
platforms.

 The Company is also focusing on innovating and adding new products and functionalities in
different platforms through application of Artificial Intelligence (AI) and Machine Learning.

 The Company has a dedicated team which continuously researches the

technology/business trends in the market and continues to build new innovative capabilities.
The team has worked on bringing about significant improvements in all their products and
releases significantly enhanced products from time to time.

 The Key focus of the Company is on applying new technologies to deliver value to its
customers. Introduction of cutting edge technological initiatives like AI, big data, machine
learning, semantic search for analyzing CVs and the cloud have transformed on field client
interactions to more technology driven client support.
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12) Share Price Movement with Market Price:

 As seen from chart below, IEIL has outperformed the Benchmark Index- Nifty 100 which
shows that the Company is well positioned in the market. IEIL’s P/E 109.1x has
outperformed the Industry P/E of 34.88x.

 Per Share Price quoted at the Stock Exchange: INR 2,445.70/-

 The Market Cap of the Company stood at INR 29,914.86 Crores as on December 07,2019.