Vivek, you may start now, please.
Thanks, Anna. Hi, everyone. Good evening and welcome to Info Edge (India) Limited Q1 2023 financial results conference call. As a reminder, all participants' line will be in listen-only mode, and there'll be an opportunity for you to ask question after the presentation concludes. Should you need any assistance during the call, kindly raise your hand on the screen. Please note that this conference is being recorded. Joining us today from the management side, we have Mr. Sanjeev Bikhchandani, founder and vice chairman, Mr. Hitesh Oberoi, co-promoter and managing director, and Mr. Chintan Thakkar, CFO. Before we begin today, I would like to remind you that some of the statement made during today's conference call may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to slide number two of investor presentation for detailed disclaimer.
Now, I would hand over the call to Mr. Hitesh for his opening remarks. Thank you, and over to you, Hitesh.
Thank you, Vivek, and good evening, everyone, and welcome to our first quarter earnings call. As always, we will start with an update on standalone financials, market conditions for each of our operating verticals, and then cover each business financials in more detail, to be followed by Q&A. The audited financial statements and other schedules on segmental billing, revenues, et cetera, along with the data sheet, have been uploaded on our website, infoedge.in. Talking about our Q1 standalone financials. Overall billings in Q1 grew to INR 524.2 crores, up 62.4% over Q1 of last year. Revenue in Q1 stood at INR 507.7 crores, up 54.6% from Q1 of last year. Billing and revenues along with acquired businesses like Zwayam and DoSelect stood at INR 537 crores and INR 521 crores respectively.
Operating expenses for the quarter, excluding depreciation and amortization, were INR 344.5 crore, up 53.6% over Q1 of last year. Operating EBITDA for the quarter stood at INR 163.1 crore versus INR 104 crore last year, a growth of 56.8% over Q1 of last year. Operating EBITDA margin for the quarter stood at 32.1% compared to 31.7% for the same quarter last year. Operating EBITDA for Info Edge, including acquired businesses, stood at 165.4 crore, a year-on-year growth of 59%. Cash from operations for standalone business for the quarter stood at INR 164.5 crore compared to INR 110.4 crore for Q1 of last year.
Deferred sales revenue grew to INR 825.4 crores as of June 30, 2022, versus INR 506.9 crores as of June 30, 2021. Year-on-year growth of 62.8%. The cash balance of Info Edge, including the wholly owned subsidiaries, stands at INR 3,439 crores as of June 30, 2022, versus INR 3,561.1 crores as of June 30, 2021. Talking about the recruitment space, hiring sentiment across sectors remained strong. The Naukri JobSpeak Index for the quarter was up 32%. Amongst the IT clients, we continue to see strong momentum. High attrition and a strong pipeline continue to drive recruitment in this vertical.
Increased focus on fresher hiring was also noticed during the quarter. As far as non-IT customers go, we saw a revival of hiring in sectors like retail, education, insurance, real estate, travel and tourism in the last two quarters. There seems to be a strong manpower demand across sectors, and that is also driving up engagement of candidates on the platform. The demand for talent continues to be high in both the metros and non-metros across scale levels. Moving on to the real estate vertical. We witnessed a good momentum in new home sales across top cities in Q1. While home prices saw an upward trend in most markets, affordability continues to be solid. We expect reasonable number of new launches to continue in the residential buy segment despite recent increase in repo rate and home loan rates.
Rental supply also saw fast uptake in the market as more offices opened up to work from office or hybrid working models. Commercial spaces also sort of saw faster uptake with negligible or no impact of the third wave of COVID. The matchmaking category recovered from last year's slowdown caused by multiple sort of COVID waves. Users are back and engagement levels are up, you know, higher than what they were during pre-COVID times. We also experienced a change in our target sort of audience in the last couple of quarters, with more prospects now increasingly taking charge of the matrimony search process instead of their parents or guardians. This is more prevalent in the top metro cities, where high intent dating space is also fast emerging.
Moving on to the quarterly financial of the recruitment business. In Q1 of 2022-23, the recruitment segment billings were INR 415 crores, up 64.6% from Q1 of last year, while revenues were INR 387.1 crores, up 67.5% from Q1 of last year. Operating EBITDA stood at INR 230.6 crores, up 80.2% from Q1 of last year. Margins stood at 59.6% versus 55.4% in Q1 of last year. Cash flow from operations for the recruitment vertical during the quarter stood at INR 235.4 crores, up from INR 148 crores reported in Q1 of last year. Billings for Naukri India for the quarter stood at INR 354 crores, up 72.3% year-on-year.
While revenue for the quarter for Naukri India stood at INR 326.8 crores, up 76.3% year-on-year. Recruitment segment billings, including acquired businesses like Zwayam and DoSelect, stood at INR 427.9 crores. A growth of 69.7% year-on-year for this quarter. iimjobs and Hirist also has reported strong 64.8% YOY growth in their billing numbers, closing at INR 15.3 crores, up from INR 9.3 crores reported in Q1 of last year. A well-integrated GTM, a go-to-market with Naukri India team worked well for Zwayam and DoSelect, with both these businesses closing the quarter with billings of INR 6.25 crores and INR 6.59 crores respectively.
The Naukri business, as you can see continues to sort of grow strongly and it's been now six quarters. Naukri India witnessed higher recruiter and job seeker activity during the quarter. On the job seeker side, we saw 23,365 new registrations per day last quarter, and we crossed 10 million+ active install base on the Android app. Our sales strategy for the quarter focused on creating awareness of value proposition of our products to drive value optimization with our customers. The quarter also witnessed 49% year-on-year growth in new client acquisition.
The other sort of, you know, sort of, vertical we have, AmbitionBox, which is, you know, our play in the career sort of, reviews and rating space, grew handsomely, to overtake, our the leading competitor in this space. AmbitionBox reported 6.29 million unique visitors in Q1 2023, making it the largest, sort of careers and review and ratings platform in India. Our marketing team recently launched a series of new digital video campaigns, hashtag MyKindaNaukri, targeting the Gen Z audience. This would further cement Naukri's leadership in traffic share and improve its top of mind recall amongst new generations of job seekers. That's the idea. Moving on to the Shiksha business.
In Q1, Shiksha billings grew 30.7% year-on-year and stood at INR 30.4 crore while revenue grew 37.4% year-on-year to INR 31.3 crore. The Shiksha business made an EBITDA of INR 6.2 crore during the quarter versus INR 7.7 crore in Q1 of last year. Cash from operations for the quarter stood at INR 5.3 crore against INR 8 crore reported in Q1 of last year. The Shiksha business has now delivered strong and consistent revenue growth for the last seven quarters and has been generating cash. The delayed closure of academic year 2022 had an impact on new students registering on the platform. As the concerns regarding COVID subside, we expect the trend to normalize in a few quarters.
The new sort of private universities in India, we believe will offer you know offer an opportunity for Shiksha to expand its footprint further. We also saw our study abroad business, which is relatively new, saw strong recovery in students opting to study in the U.S. and in the U.K. and the U.S. We continue to invest in making our content more comprehensive and more student friendly, and in building deep domain expertise in this space. Moving on to the 99acres business. Billings in 99acres grew 173.2% year-on-year on a COVID impacted Q1 and stood at INR 61.1 crore, while revenue grew from INR 49.2 crores in Q1 of last year to INR 66.3 crores in Q1 of this year.
The operating loss for the quarter stood at INR 35.4 crore against a profit of INR 10 lakh reported in Q1 of last year. The business reported a cash outflow from operations of INR 46.6 crore for the quarter against a cash outflow of INR 36.4 crore in the same quarter of last year. In 99acres, we recorded revenue growth across all major categories, resale, rental, commercial, and new homes. Consolidated efforts were put in during the quarter to increase and improve the quality of listings on the platform. Owner listings grew 7% year-on-year, while broker listings grew 9% year-on-year. Premium listings continued to see good adoption from brokers.
The review from residents and recent transaction prices were further scaled up to help buyers and owners get more insights about the real estate market on the platform. We continue to invest on platform content, client delivery and marketing in this business. Moving on to the matrimony business. Jeevansathi offerings launched in March 2022. Billings in Q1 declined by 29.8% year-on-year to INR 17.6 crores and revenue declined 9.1% year-on-year to INR 22.9 crores. The operating EBITDA loss stood at INR 27.6 crores for the quarter against a loss of INR 23.2 crores in the same quarter of last year.
Cash outflow from operations for the quarter stood at INR 49.8 crores against an outflow of INR 18.4 crores in Q1 of last year. As we discussed in our last call, Jeevansathi has made chat for users free on the platform. The platform is seeing strong traction in this feature, resulting in more chats engagement on the platform. In addition, several TV celebrities and influencers across communities were roped in to drive the chat and free messaging to our users. In addition to this, the business will continue to focus on improving the platform experience and building brand salience in the year ahead. As far as consolidated financial highlights for the company go.
At the consolidated level, the net sales for the company stood at INR 547.3 crores during Q1 versus INR 328.6 crores for Q1 of last year. For the consolidated entity at the total comprehensive income level, there is a loss of INR 3,342 crores versus an income of INR 158.2 crores for the corresponding previous year quarter ending June 30, 2021. Adjusted for the exceptional items, PBT stood at a profit of INR 339.4 crores in Q1 2023 versus INR 45 crores in Q1 of last year. Thank you. That's all from us. We are now happy to take questions.
Thank you, Hitesh. We now move to begin our Q&A session. Anyone who wishes to ask question may raise your hand on the screen. We'll take your name and announce your turn in the question.
Thank you, Vivek. We have first question from Vivekanand Subbaraman from Ambit Capital. Vivek, go ahead and ask your question.
Hello. Thank you very much for the opportunity. Sanjeev, now that we have instituted a clear-cut structure of making financial investments via AIFs, and the Zomato lock-in is now behind us, why not recycle capital by monetizing your stake? I mean, we've taken great pride in being early-stage investors and having a solid track record of great returns there. That's question one. Second one is for Hitesh. You now had a chance to work with strategic investments like NoPaperForms, Univariety, for several years now, three years almost. Did these investments contribute to Shiksha's revenue scale-up, almost 2x of, I mean, more than 2x of pre-COVID levels? You know, this question is more in the context of investments made in the last 12-18 months like Zwayam, DoSelect, and more recently, 4B Networks and AMINICA also. Thank you.
Yeah. Shall I answer the Zomato question first, Hitesh?
Yeah, please.
Look, we don't need to sell Zomato stock in order to invest in startups. We have funds in place. We have enough money on the balance sheet to put into those funds. We have half the money comes from Temasek. You know, the truth is that, it's not easy to sort of find a Zomato or a PolicyBazaar, right? You invest today, hopefully five, seven years, one or two become highly successful. You know, and while we can exit from these investments, both Zomato and PolicyBazaar, maybe PolicyBazaar in a couple of months later, the truth is if you ask us to deploy that amount of money productively into early-stage companies within two, three years, we will end up making suboptimal investments in all likelihood, right? Now, we could sell and keep cash.
We could sell and give cash back to shareholders. You know, what, you know, I like to believe is that if the business has got legs, why not stay for a while? Now, this is just my sort of belief. Obviously, the board will decide. We are in no tearing hurry to sell any stocks. We will. You know, it's not as if we have, you know, we sort of vowed to sell a company the moment it goes public. If the business has got legs, perhaps we should hold on. This is an ongoing conversation with the board all the time. It's not written in stone. It's up for review periodically.
You know, what I also believe is that if the business has got legs and you hold on, you have a future, right? If you sell, you only have cash. Cash is valued at 1x. A future is valued at a multiple of whatever the future is. Yeah, we like to hold on, if we believe the business has got legs. Yeah, Hitesh, you wanna answer the second question?
Yeah, you know, I guess your question was around whether the strategic investments we made in companies like Univariety and NoPaperForms helped us sort of scale up the Shiksha business over the last two years. Is that correct?
Yes. The extension to that was the aspiration that you have across your operating businesses to make strategic investments and either you know enhance your revenue or bring down costs, right?
Listen, there are, you know, two or three types of strategic investments we are sort of making. One is of course outright acquisitions. AmbitionBox, which I sort of spoke about, was an acquisition we made a few years ago. iimjobs is a company we acquired 100% a few years ago. Zwayam is a 100% acquisition. DoSelect is a 100% acquisition. Now, in these cases, of course, we are deriving tremendous value from the Naukri network, because we are taking these businesses in and the hope is that we scale them up massively because of our distribution and other capabilities. There are companies where we are, you know, investors, but we don't really run the operation.
You know, like, Univariety, like, NoPaperForms, like greytHR. Now, here, right now, it's not as if our internal businesses are cooperating or collaborating with these companies, you know, on a regular basis. They will periodically exchange ideas, but there is no sort of business cooperation between these businesses. The idea here is that, you know, we sort of, we are in these companies, we like them, and if they continue to scale up, we would like to invest. You know, if they continue to scale and perform, then we would like to sort of own more and more of these companies over time, if the entrepreneurs are okay with it. That's the nature of these sort of investments.
Now, let's see how this plays out. It is somewhere in the middle now where, you know, in it we own 76% now. There is a path to getting to 100%. We want the entrepreneur to run the show for some time because we believe that's the best way to scale the business. We don't think we can take on that business internally and do a better job of what, you know, maybe that team can do right now. That's the third type of investment sort of, you know, we made, where we own majority. We are working very closely with the entrepreneur. Ultimately, we would want to go to 100%, but we would like the entrepreneurs to run the show for some time. I don't know whether I was able to answer your question.
No, no. This made a lot of sense. I guess, what you are saying is Shiksha.com scale-up versus pre-COVID levels primarily happened internally rather than collaborating with these startups.
Yes.
Sanjeev, just one small follow-up.
Yeah.
You said that sure you can exit Zomato quickly, but deploying this kind of money in startups may lead you to not be that prudent if it has to be done over.
It almost certainly will. Almost certainly will lead us to be not so prudent.
Is that because of perhaps the shallow nature of the startup universe still in India? Or is it something else? I'm just trying to understand this better.
No, no. Let me put it this way. See, you typically, when you have a fund, right? You will say, "Okay, fine. From three years of close of the fund, you will, you know, need to write all your first checks." Now, if you are going to invest INR 10,000 crore, let's say, which if you exit from both these companies, you wanna invest INR 10,000 crore, right? You're talking about investing INR 3,000 crore within three years, right? As first checks, and the remaining goes into follow-on checks. Now, that's a tough ask, you know, because we like to go to early stage.
Early stage, if you wanna invest INR 3,000 crore as the first institutional check into a company with the average ticket size, say, of INR 10 crore, you know, you're talking about 300 investments. Now, 300 investments is a lot for, from a team management, team member perspective, right? Sooner or later you will slip up. You have to have a very large number of people working with you. These are, you know, they are tough things to manage. INR 10,000 crore in early-stage companies, perhaps the risk level will also be different.
Okay, understood. Thank you and all the best.
Thank you.
Thanks, Vivek. The next question is from Ruchi Mukhija, from Elara Capital. Ruchi, go ahead and ask your question. Ruchi, you are there? Maybe we'll go to the next person. The next question is from Jaideep Chirayath, CIO from Edwin Securities. Jaideep, go ahead and ask your question.
Yeah, am I audible?
Yeah, go ahead, Jaideep.
Yeah. Hitesh, my question was specific to 99acres. 99acres, we have mentioned in our investor deck saying that owing to higher A&P spends for this quarter, EBITDA loss is INR 35 crore. I want to know if this is a one-off, will this sustain in Q2 of this year, and hence is the going forward trajectory of this business? We are burning close to INR 50 crore of cash per quarter here. Want to know how long will this sustain, and if it were not be for this A&P spend, what would this number be for, this INR 35 crore of EBITDA loss?
Right now there's, you know, actually for a while now, this space has been very competitive. You know, a lot of our competitors have been spending a lot of money, and there's a lot of new money just come into the space. And therefore we've been forced to respond. Also we've been out of media for a while last year because we were post-COVID. We didn't spend as much money as we spend normally. Now going forward, you know, the A&P spend will continue. It might moderate a little if the competitive intensity eases, and hopefully our revenue will also look up over time. Our billings will sort of hopefully increase over time. But it's hard to say how this will play out at this point in time.
I mean, of course, internally, we will target to sort of, you know, reduce our burn in the coming quarters, but one can't be sure. I can't give you a number and say, "Listen, this is what burn is likely to be going forward." All I can say is, we will try and optimize our costs and we will try and grow revenue. Hopefully the burn will sort of over time go down. You know, if competitive intensity increases and all hell breaks loose, then, you know, we'll be forced to sort of respond to maintain our share. The space has become a lot more competitive than it was, you know, a couple of years ago. At the same time, the real estate market is also bouncing back.
The market was in the dumps for many years, for various reasons. For the first time, it looks like the real estate is sort of back. Prices are going up. The number of transactions have gone up in the last few quarters. We're hoping that the real estate market will continue to boil for some more time.
Yeah, sure. That's helpful. Only point that I wanted to have a follow-up on was what was the absolute marketing spend that we incurred for this campaign that we have been doing for quite some time? I've been seeing the ads coming on CNBC and all of that, so.
It's good to hear that you've been seeing the ad because you're our TG. But how much we exactly spend, Chintan, did we give out that breakup? I mean.
I don't think we give out at the business segment level.
Okay.
It was substantially higher than.
See, the idea is just to know how much of this will wither away with time. How do I look at this business going forward in terms of EBITDA and all of that?
See, whether it will wither away with time, I don't know. You know, because we, like I said, we intend to continue to spend on advertising and promotion at least for some more time, right? A lot will depend on, you know, what sort of competition does in this space. Just to give you a sense, this number will be at least around INR 30-35 crore a quarter.
Okay. That's very helpful. Did we see any tangible impact on sales because of the campaign? Because it's been going around for quite some time.
Like I said earlier, we're seeing a lot of competition in this space, so our competitors are spending a lot of money, and that was beginning to hurt us. You know, we had to respond to get our traffic share back. Now, sales will follow, you know, over time. You know, because we sell subscriptions and, you know, clients sort of like to watch, respond, and see what happens with response, and then based on the response they get on the platform, they sort of, you know, renew and upgrade over time. Whether this will result in more sales or not will be known to us only after a couple of quarters.
Sure. Thanks, Hitesh.
Yeah.
Thanks, Jaideep. Next question is from Mohit Motwani from Edelweiss. Mohit, go ahead and ask your question.
Hi, am I audible?
Yeah. Go ahead.
Thanks for the opportunity, and congratulations for a great set of numbers. My first question is on the ad spends for Jeevansathi.com. We have seen a quarter-on-quarter decline in ad spends, and you have mentioned that, you know, you will maintain high ad spends, because the competitive intensity is quite high. Does this decline in quarterly ad spend align with the fact that you're providing most of the services in Jeevansathi.com for free?
You're right. We have changed the model in Jeevansathi.com, and we are experimenting with the new model. We've gone free on, you know, a lot of services which were paid earlier are now available for free. That's helping us acquire more users. Our hope in the long run is that, if this model works for us, then we will not have to spend as much money on marketing as we used to spend earlier, right? That's the goal. Of course, you know, revenue is gonna take a beating. We believe that if we are able to get more traffic, and if we are able to make more matches and have more marriages happening through the platform, ultimately we'll be able to figure out a way to monetize that traffic.
For a few quarters, you know, revenue will go down and it's already down 30% over last year. The hope is that it'll, you know, our spend will also go down over time. After a few quarters, we should be in a much healthier position with a lot more users, a lot more traffic, and a lot more engagement on the platform. Then hopefully we'll figure out a way to monetize at some point in time.
How long do you plan to continue this premium model for Jeevansathi.com? You know, what leads us to believe that, you know, once we start monetizing this, after the free service, when we start charging, you know, they will stick with the platform. What leads us to believe that? Is it because they'll be well accustomed with the features and what is the thought behind that?
This model is as far as we are concerned, at this point in time, this model is here to stay. We are looking to stay free for a long time. When we start charging, it is not as if we will sort of go paid again. We may probably figure out other services to charge for and other features and functionalities to charge for over time. Like I said, it's early days. Our hope right now is that this change in strategy will help us get more traffic, more engagement, will enable us to sort of, you know, get the network effect going for us, and will hopefully make us the largest player in this space after a while, in terms of users and traffic and engagement. Once that happens, then, you know, monetization will follow.
That's helpful. One other question on recruitment. Right, we are booking a great set of numbers on the growth front, and this is definitely because of how digitization has become a must today for the enterprises, right? Your normalized on the last 10 years, if I see, it has grown at 16%-17% CAGR. Do you expect this, you know, the current high growth phase to normalize in the next few years? Or you expect these high growth levels to continue for the foreseeable future?
See, it's very hard to say. It'll depend on two, three things. One, of course, you know, the IT market. IT is, in our sense, now close to more than half our sort of revenue. If the IT market continues to do well, then the business will continue to grow fast with that part of the business. Right now, you know, IT sort of drove our growth, was responsible for our high growth rates last year and continues to be, I mean, IT hiring has slowed down a little bit in the last one or two quarters, but it continues to be strong. That's one. The second, of course, thing which impacts our growth is, you know, the economy and how fast the economy grows.
Now, when we went into COVID, the economy had started slowing down for the last couple of years before COVID and during COVID also. You know, we didn't see much growth, because the economy was growing at 4-5% per annum. If the economy sort of right now we are seeing a you know, surge in growth in non-IT as well because the market is opening up. The businesses were shut because of COVID, now they're back to sort of operating like they used to earlier. If the economy starts growing faster than it was growing earlier, then that should also help.
The third thing, of course, you know, like, which I spoke about, is that we are driving better price realization for ourselves because we are sort of, you know, helping our, you know, clients understand the value that we're delivering to them. That is helping us realize better prices. Also because the economy is sort of doing well, and you mentioned digitization, everybody's going digital, we are adding more customers than we were adding earlier. Lastly, we, you know, got these new sort of set of products, you know, like I mentioned, you know, Zwayam, DoSelect, iimjobs, Hirist. We have a much bigger portfolio of products, today than we had earlier.
We are hoping and expecting that these new products in our portfolio will continue to grow at a fast rate going forward. Today, they're of course a very tiny proportion of our business, but hopefully they'll grow much faster than the rest of the business, even if there is a slowdown tomorrow.
That's all helpful. Thank you for taking my questions. Thank you.
Thank you, Mohit. Next question is from Srinath from Bellwether. Srinath, go ahead and ask your question.
Hi, Sanjeev, just wanted to, you know, ask you what are your views on the ESOPs that have been issued by the new tech companies in and around listing? Subsequently, these ESOPs have, you know, seen large write-offs that kick in. Of course, there's an accounting angle to it, but they're front-ended. From a good governance practice, in the context of good governance practice and in the context of, you know, our ownership in this space, you know, how should one look at these large ESOP issuances?
Yeah. I think it's important to look at each case separately. Okay? Each case is individual. I would not like to generalize. A couple of things. First of all, was there disclosure prior to the IPO or during the IPO document or and the road shows that, listen, this is the situation, this is going to happen or this has happened, has been. Now, if there's prior disclosure, it's one thing. If there was no prior disclosure, it's quite another. No prior disclosure is a problem. Okay? The second thing I'd like to point out is that, if founders have been diluted too much, right, will they have an incentive to stay for three, five years post the IPO, seven years post the IPO to actually run the ship?
If they have been diluted too much, maybe some amount of ESOP is justified, and this may not be just in, you know, tens of thousands shares. It could run to 1%, 2%, 3%, 4% of the company. If the dilution was forced upon them simply because of the competitive environment and, you know, competition raising too much money and you had to raise in response, then perhaps a more sympathetic view can be taken, which is what has happened in a couple of cases that we were involved in. The third is, was the right process followed in granting the ESOP? Did the founder grant himself the ESOP or herself the ESOP?
Was there an NRC, a compensation committee where there were no executive directors involved, and it was either independents or investor directors, but the NEDs who were involved and not related to the promoter? Now those are the touchstones I would use to determine what is acceptable and what is not.
Thanks. Thanks, Sanjeev. That was really useful given the, you know, confusion as in the listed analysts are finding it a bit difficult to make the bridge because of the concept of adjusted EBITDA is kind of new to us. I'll, you know, it's nice of you to share your view. Hitesh, wanted to kind of get an understanding of impact of the tech sector to us now, including, you know, tech hiring by tech companies as well as tech hiring by non-tech companies like banks and so on. Where is that now and, you know, how is that broadly growing?
Look, you know, tech hiring was on fire for the last five or four to five quarters and, you know, attrition rates at most companies peaked and talent is hard to get. You know, offers were getting rejected left, right, center, all kinds of stories around people getting double, triple the salary they were getting earlier. Now of course the startup hiring market has slowed down because of what we are seeing around us. Startups are not a big part of our revenue sort of stream. Anecdotally, what we are hearing from our sales team, et cetera, is that, you know, tech hiring has slowed down a little bit. Having said so, attrition rates are still reasonably high at most companies, and talent is still hard to get, right?
It's not as crazy as it was maybe three quarters back, where companies were, you know, attrition rates were running at 40%, 50% in most companies and offer sort of rejection rates were 70%, 80%, 90%. It's still very, very hard to hire in tech and there are still enough jobs in the market for people who are looking. Has it slowed down over the last two, three, four months? Maybe it has a little bit. Is it likely to slow down further going forward? I suspect it's going to be a function of what happens in the U.S. There was some talk of a recession in the U.S. and companies became cautious as a result.
I don't know whether they are seeing business slow down, but you know, because of the talk, sort of companies became a little careful. If you know, the U.S. market turns and if you know, the U.S. starts growing once again, then who knows, I mean, you know, we may go back to the market we had two quarters back. Very difficult to say what is gonna happen going forward. Clearly in the U.S. there's no slowdown in hiring on the non-tech side, you know. I was in the U.S. for a couple of weeks and there are so many people who I've met who've sort of been to the U.S. recently. There's a huge shortage of talent in at least, you know, areas like retail, hospitality, travel, you know.
There's a complete shortage. IT hiring, you know, did slow down a little. I mean there was some talk of a recession and because, you know, the Nasdaq went down by 30% and startups corrected by 70%-80%, there was this sort of whole thing around tech hiring slowing down. My sense is that if the U.S. goes back to sort of growing like it was growing earlier, then this talk will go away and, you know, companies which have become careful will start hiring once again as aggressively. Even right now, like I said, you know, it's not as if hiring in tech is easy. It's still very, very hard.
Got it. It's still about 60% of our revenues, the tech-
If you include.
In tech and in non-tech also.
If you include, the tech guys who are getting hired in non-tech companies.
It's still about 60%?
Yes, it's still about 60% if you include the tech guys who are getting hired in non-tech companies.
Got it. My last question is on 99acres. After you know some understanding of the PolicyBazaar business model, wouldn't a business model similar to that, you know, how do you see that kind of fitting in the real estate space where there's a lead generation and then subsequently a call center offline, you know, feet on street, where we do our own kind of, you know, transactions, subsequently build an ancillary landscape in real estate with other tech products that we could sell builders and kind of take a much more ecosystem approach to this? Of course, you know, the burns will be significantly probably 5x, 6x higher than where it is now. But would that also translate into us kind of having a significant better pie of the real estate space?
You know, any idea on how one should kind of look at a completely holistic approach of, you know, working on the industry or just looking at a listings platform, Hitesh, Sanjeev, whoever, you know?
See, I-
I was just curious.
No, that's a very good question. You see, there are all kinds of players who exist in the real estate space overseas and in India as well. There are brokerages. There are, you know, marketplaces like ours. We've invested in a company called 4B Networks. They are trying the aggregation model, which is very different from any of these models. See, we've tried. You know, we actually experimented with a brokerage model many years ago. We had set up a company called Allcheckdeals, and we ran that business for a while, and then we shut it down. While you are right in saying that, you know, if we go end to end and sort of do the transaction, we can monetize a lot better. Then it's also more expensive.
You know, if you go down that path, you have to invest in a sales team, you have to do transactions, you have to sort of. You know, it's a different business, a different model. Our belief so far has been that, perhaps it is possible to create more value in the marketplace model. The thing with these models, and especially marketplace models, is that, you know, you have to be the number one player. You have to sort of, you know, be a leader in the market. You know, if you're a number three player, you don't create value. You know, you have to break away from the rest of the pack, to be able to create disproportionate value. As a brokerage, perhaps many brokers can survive, in the market and do well.
If you are, you know, if you want to be a marketplace then you can create disproportionate value, but then you have to be a leader, like we are in Naukri. Also the two models compete with each other, so it's very difficult to do both. For example, if you become a brokerage ourselves, you know, our clients may sort of not like it, and they may not want to advertise with us. It's a choice. So far, you know, we are of the view that we should perhaps continue to sort of invest behind the model we have sort of, you know, sort of been working on for the last few years. If we have to do anything in.
If we have, if w e could make investments in sort of other models, like we have invested in 4B Networks, but inside the company we would like to persist with what we've been doing for years. It may not be a good idea now to sort of give up on this model and start something from scratch. We do believe that it's gonna be very difficult to be able to do both.
Got it. Thanks, Hitesh, and thanks, Sanjeev, for taking your time off and giving a very detailed answer to all my questions. Thanks a lot. I'll get back into the questioning.
Thank you, Srinath. The next person we have, Aditya Suresh from Macquarie. Aditya, go ahead and ask your question.
Hi, Hitesh. Hi, Sanjeev. Thank you so much for the presentation, for your candid responses and also for the great numbers this quarter. I have two questions. First was on the Naukri.com business, and I guess the question really is about the sustenance of the strong growth, right? Based on kind of what you're showing as billings and deferred revenue and the likes, would it be fair to conclude that what you're showing as sales, that momentum probably sustains at least over the next few quarters? If so, therefore your margins also gonna sustain.
I guess the context of the question really is that your EBITDA margin has really been between 50%-60%, and today we're closer to the peak of Naukri.com business. I'm just wondering about the sustenance of that EBITDA margin in response to where you're seeing the revenues at. That's the first question. I have a second question as well.
Listen, we've had a great six quarters in Naukri.com. Last year it was primarily because of IT hiring. This year, I mean, in Q1 of this year, our Naukri.com India B2B business billings grew by 80% actually, right? Which is, even the billing growth has accelerated. You know, we were growing at like 60- 70%, then now last quarter we grew at 80%. Will this sustain? I don't know. See, what we are seeing is a non-IT hiring pickup. But there are some murmurs around IT hiring slowing down. In Q1 we saw IT hiring was a peak, non-IT hiring was a peak, which is why our billings grew by 80%. I don't know what is going to happen to IT hiring going forward.
If IT hiring sustains, if it continues to be as strong as it was last year, then maybe we can maintain these growth rates. But it's a wait and watch situation. Margins, you know, a lot will depend on how much we want to. You know, given that we're making so much money in Naukri, I mean, last to last quarter, we generated about INR 300 crores of cash in the Naukri business. Last quarter, which is our weakest quarter, actually, our smallest quarter, we generated INR 230 crores of cash in the Naukri business. Clearly we can invest a lot more in Naukri. We are, for example, you know, back in media after a long time, not because we have to be in media, but we think it's a good idea to sort of be in media and sort of continue to be top of mind in the market.
We are investing behind new verticals like Job Hai and BigShyft, which we are building in-house. These verticals don't make any money. AmbitionBox does not make any money. We are investing behind Zwayam, we are investing behind FirstNaukri, we are investing behind DoSelect. These are tiny businesses right now. We're investing behind Hirist, again, a tiny business. There are lots of new sort of verticals, you know, adjacent verticals we are investing behind inside Info Edge, so that when the market slows down, we continue to sort of and these new products continue to sort of get us growth going forward. The margins, you know, we can improve our margins substantially. We can go to even 70% EBITDA margin if we stop investing in these businesses.
We've taken a call to invest more and, but at the same time, we don't want to sort of compromise too much on margin. We would like to maintain the margin in a certain range, so that you know, so that we are sort of disciplined about it also.
Thanks, Hitesh. That's very clear. I guess in terms of the other verticals, do you have any updated kind of plan in terms of is there any kind of upper limit in terms of the amount of losses you might be able to fund here? Or does the position remain that I guess we'll see how it goes and we kind of wait for the consolidation to happen?
I think we should. Let's take the Jeevansathi business. I think we should give it another two to three quarters to play out because we've just changed our model. You know, if this model succeeds, then our take on the business is that it may not require the kind of marketing spend, you know, we've been doing in, you know, in this space going forward. You know, we're okay with losing revenue, sacrificing revenue.
As long as we get the network effect going, we get traffic, we get engagement on the platform, we'll figure out a way to monetize later. We're trying to change the game here. A lot will depend on how competition responds, what happens over the next two, three quarters. Let's wait and watch. Clearly we don't want to invest much more than what we were investing last year, right? The idea here is to change the game so that we don't have to make those kind of investments in the business to grow it. That's the Jeevansathi vertical. Now, 99acres, the truth is we lost some ground in 99acres over the last two years because of COVID, and we want to regain that ground.
The space has become a lot more competitive. There are many more new players in this space. There's NoBroker, there's Housing.com, there's Square Yards, there are a bunch of other people who are trying. The market is looking good after a long time. You know, we've got some things we are working on. If some of those sort of things work out, as planned, then we are hoping that our burn will go down with every sort of passing quarter. Those things have to work out. Again, I think, we'll have a much clearer answer on what will happen in this business, perhaps maybe three quarters from now.
Thanks, Hitesh, for your candid responses. Much appreciated. Thank you.
Thank you, Aditya. Next we have Vivekanand from Ambit Capital. Vivek, go ahead and ask your question.
Yeah, thank you for the follow-up. Hitesh, you said that you will persist with this strategy in Jeevansathi. What's your take on the time it takes for this model to scale up traffic without the kind of intensity of A&P that you were doing in the past? I'm asking this question in the context of you know, Similarweb web traffic data, which doesn't really indicate that much of a change in the Jeevansathi domain. I understand that the mobile app data isn't captured here, but if you could just help us understand you know, how patient you will be with respect to this pivot.
You're from Avendus, right?
No. I am from Ambit.
90% of the traffic in Jeevansathi is on the app. The Similarweb data has no relevance. We went free about three months, 3.5, four months back, and we have seen an increase in traffic on the app. We are seeing more registrations. There is reasonably good word of mouth around the fact that we are free. We are seeing more matches happen on the platform. Now, is it enough to change the game? It's hard for me to say. It's only been three, four months. Have we cut down our ad spend? A little bit, right, from where we were a few months ago. We wanna give it a good shot.
You know, we wanna sort of keep ad spend high for a while, we want to sort of be free for a while, and then, and we wanna see what happens. Now, this may never work out, right? This could just fail. You know, there's a caveat. It's not as if we are sort of 100% sure that this model is gonna succeed. It could fail. We want to give it a good shot. If it starts to succeed, you know, at least on the traffic front, we'll have a clearer answer two quarters from now, right? On the revenue front, it could take longer because we will have to figure out new ways of monetizing this traffic. Because, you know, if it starts to succeed, we would not want to go paid, once again. We would like to keep the chat free.
That's pretty useful. Just one additional question in this context. Till now, we have only explored a model of subscription for this service. Is it possible to, you know, think about, say, alternative, perhaps, advertising or transaction business models here or is it too early to even talk about these business?
See, our team has started thinking about it, and there are sort of, you know, other models around. You know, if you sort of look at what's happening in China and sort of other markets, there are some other models. You know, so we are studying those models and we are trying to figure out what we can do here. Like I said, see the short-term focus. The focus for the next two, three quarters is traffic growth, more engagement, more matches, more registrations, more monthly active users on the platform. The idea is that, and like I said, we'll start worrying about, you know, revenue later. The hope is that once we get to that point, we won't have to spend as much money on marketing as we are spending right now.
Okay. That part is clear. Just to understand this better, you know, you think that you will reach a stage where you will not have to spend as much in advertising on a sustainable basis. Is that what you mean when you say?
That's the hope. If you are free, that's a strong value proposition and that should drive a lot of, sort of, you know, traffic on the platform once there is word of mouth, right? We need to get the word of mouth going. We have to have, you know, get more traffic, get more matches happening through our platform then, you know, then that creates word of mouth and that automatically gets more users. Now whether that will play out like we expect it to play out and whether it will play out in one quarter or three or six is hard for me to say right now. What I can tell you is that we are seeing more traction than we were seeing three months back. We're not spending as much money as we were spending earlier already.
Okay. Understood. Thank you very much for the detailed answer.
Thank you, Vivek. The next question is from Vijit Jain from Citi. Vijit, go ahead and ask your question.
Hi. Thank you for the opportunity. My question is on the education business. Just trying to understand, you know, with this new business model that you are trying in there, is there going to be a lot of seasonality here around college recruitment seasons? You know, overall, you know, your two cents on how that is evolving.
There's no new business model in Shiksha.com. We are following the same model we had, you know, we were following earlier. It's just that because of COVID, the education sort of seasons have changed, you know. Because of delayed sort of board exams and delayed JEE exams and, you know, and so many other things that have been happening, the seasonality has shifted a little bit, right? Hopefully things will be back to normal by next year on that front. What has changed a little bit in the Shiksha.com business is that we are, you know, slowly and steadily scaling up our study abroad business which was a tiny part of our business till some time back and we are investing a lot more behind that sort of, you know, sort of vertical.
In that vertical the model is end-to-end transaction, right? We actually counsel students and we sort of send them overseas. We handhold them and send them overseas. Unlike the Shiksha.com domestic business which is primarily a lead gen business where we sort of generate leads and sell them to customers and then the customers sort of close on their own.
Right.
Like the 99acres business. So I hope that answers your question, Vijit.
Yeah, sure. Thanks, Hitesh. Hitesh, my second question is in the recruitment business, you did mention, you know, the non-IT sectors are starting to come back mainly contract-based services post opening up. I'm just wondering, among the bigger non-IT sectors, non-tech hiring, which are the ones where you think the momentum is fairly strong even when you adjust for, you know, the low base of last few years? Is it financial services? Is it infrastructure services? Which are the categories where you're seeing growth, you know, even versus say an FY 2019 or FY 2020?
Some non-IT sectors which have done really well over the last few years for us were tiny sectors on our platform to start with. But I don't know whether it's because the sectors are doing well or because there's more digitization and more people are moving online, are sectors like education, sectors like health, services. You know, so these two sectors for example, you know, our JobSpeak Index, you know, is the-
Right.
Has gone through the roof over the last two, three years.
Great.
Right? There are some other sectors also which are doing okay, like, banking, financial services, insurance. You know, they're not like on fire. I mean. You know, and if you adjust for COVID et cetera maybe they're okay. They're like they were earlier. Some of these sectors have done really well over the last two, three years.
Got it. Thanks, Hitesh. Those were my questions.
Yeah.
We are done with the questions so far. We may wait a couple more for 30-40 seconds. If there are more questions, please raise your hand. Vivek, that was the last question we have.
Thanks everyone. On behalf of Info Edge, we conclude this call. Thanks. You may disconnect the call now.
Thank you.
Thanks Hitesh. Thanks again.
Thank you. Thank you.
Thanks everyone. Have a good evening.
Thank you everyone. Bye.
Thank you everyone.