Hi, everyone. We will be starting now. I'm Anand Bansal, along with my colleague, Vivek Aggarwal, we'll run this call. Over to you. We have 160 people, and we can start now.
Thanks, Anand. Hi, everyone. Good afternoon. Welcome to Info Edge India Limited Q4 2021 and full year 2021 financial results call. As a reminder, all participants' line will be in listen-only mode and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please raise your hand on your 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, Hitesh Oberoi, Promoter and Managing Director, and Mr. Chintan Thakkar, Chief Financial Officer. Before we begin today, I would like to remind you that some of the statements made today in today's conference call may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to slide number two on investor presentation for detailed disclaimer.
I would like to hand over the conference to Mr. Hitesh for his opening remarks. Thank you, over to Hitesh.
Thank you, Vivek. Good evening and a warm welcome to everyone for our fourth quarter and annual results conference call for FY 2021. As always, we'll start with the overall financials and then cover each business in more detail, and then we'll have Q&A towards the end. The audited financial statements and other schedules on segmental billing, revenues, et cetera, along with the data sheet, have been uploaded on our website, www.infoedge.in. Let's move on to the standalone financials. Billings in Q4 were INR 415.7 crores, up 25.2% year-on-year. FY 2021 billings stood at INR 1,150.7 crores, down 9.3% year-on-year. Revenue in Q4 was INR 290 crores, down 10.2% year-on-year. FY 2021 revenues stood at INR 1,098.6 crores, down 13.7% year-on-year. Operating expenses, excluding depreciation and amortization for the quarter, were INR 236.8 crores, up by 4.7%. For FY 2021, expenses stood at INR 821.1 crores, down 5.6% year-on-year.
Operating EBITDA for the quarter stood at INR 53.2 crores versus INR 96.5 crores last year, a decline of 44.9% year-on-year. FY 2021 operating EBITDA stood at INR 277.5 crores, down from INR 402.7 crores last year, a decline of 31.1%. Operating EBITDA margins for the quarter stood at 18.3% compared to 29.9% in Q4 of FY 2020. For FY 2021, EBITDA margins stood at 25.3% versus 31.6% last year. Cash EBITDA for the quarter, however, rose sharply by 68.3% year-on-year to INR 179.5 crores. Cash EBITDA for the full year stood at INR 331.6 crores, down 16.6% year-on-year. Deferred sales revenue stood at INR 520.8 crores as of March 31st, 2021 versus INR 465.6 crores as of March 31st, 2020, an increase of 11.9% year-on-year.
The cash balance in the IEIL group as a whole stands at INR 3,592 crores as of March 31st, 2021, as against INR 1,551 crores as of March 31st, 2020. Key snapshots for quarter. Q4 saw a sharp revival, both in terms of traffic and billing across all our verticals. All our operating verticals did very well in Q4. Billings in the recruitment vertical experienced growth across most industry segments, led specially by IT and IT-enabled services. The growth in the underlying operating metrics signals a strong revival in the recruitment space. In 99acres, traffic grew handsomely in Q4 across all our categories, residential, commercial, and new launches. However, with the onset of the second COVID wave in FY 2022, we witnessed a sharp drop in 99acres in terms of traffic in April and May. Since then, the traffic has recovered in the month of June.
In Jeevansathi, we continue to invest in brand and marketing and user experience. The higher growth rate in both in terms of volume and value gives us the confidence to continue investing in the business for the next few quarters as well. Shiksha traffic gains over the last 18 months are now getting translated into higher revenue growth. We continue to invest in improving student engagement, both through comprehensive content and more user-centric product offerings. Moving on to the consolidated financial highlights for the quarter. At the consolidated level, the net sales for the group stood at INR 296.5 crores versus INR 327.6 crores from the corresponding quarter of March 2020. For the consolidated entity at the total comprehensive income level, there is a gain of INR 309.4 crores versus INR 115.2 crores from the corresponding quarter of March 2020.
Add for FY 2021 at a consolidated level stood at INR 1,408.8 crores versus a loss of INR 245.7 crores for FY 2020. This includes an exceptional gain of INR 1,434.2 crores as opposed to a gain of INR 182 crores last year on account of notional gain arising from fresh infusion by other investors in our JV associate companies such as Zomato and PolicyBazaar, et cetera. Moving on to business-wise results. We'll first discuss Recruitment. In Q4 2021, Recruitment segment billings were at INR 297.9 crores, up by 22% year-on-year. While revenues were INR 198.6 crores, a decline of 13.9% year-on-year. Operating EBITDA stood at INR 99.3 crores, down by 24.3% year-on-year. Margins were 50% versus 56.9% in Q4 of last year. For the full year as a whole, Recruitment billing was down 11.9% to INR 806.9 crores, while revenue declined by 15% to INR 771 crores.
For the full year, EBITDA margins stood at 55.4% compared to 55.6% in FY 2020. Cash EBITDA for the quarter, however, for the recruitment business stood at INR 198.9 crores, up 37% year-on-year. We saw strong performance in Q4 in recruitment in Naukri India with 22% year-on-year bio-wide growth in billings, with March billings growing at 54% year-on-year. Overall, we saw secular growth with an increase in billings, in platform usage and the number of customers across most segments, including IT and ITeS and consultants, which together account for over 50% of the Naukri India top line. We saw a sharp upswing in job seeker metrics as well on the platform. New CV registrations per day stood at 16,000 per day, a growth of 25% compared to Q4 of last year.
Average CV modifications per day also reached a record high of 512,000, a growth of 21% year-on-year, and 41% in March 2021. Recruiter engagement with the platform improved further in Q4, majorly led by IT, healthcare, and power industries. We redefined our marketing strategy for the quarter with very limited spends as per the current business environment. At the same time, we also managed to maintain our market share of 80+ in the country's traditional online classified recruitment business. Moving on to iimjobs and Hirist. Not included in the standalone numbers, iimjobs reported a billing of INR 10.3 crores for Q4 of 2021. This is a growth of 54.9% from Q4 of 2020. For the full year, FY 2021, iimjobs and Hirist added 4,300 new customers, and EBITDA for Q4 2021 stood at INR 1.6 crores, up from a loss of INR 2.3 crores in Q4 of 2020.
Cash EBITDA for Q4 for iimjobs stood at INR 5.4 crores. For the full year, cash EBITDA was INR 6.3 crores. As some of you may already know, we announced we completed the 100% acquisition of Bangalore-based Zwayam Digital Private Limited this month as in June. Zwayam is engaged in the business of providing SaaS-based sourcing and screening recruitment solutions and providing end-to-end recruitment solutions with configurable plug-and-play modules. Zwayam revenue for FY 2021 stood at INR 6.46 crores for the full year. The acquisition of Zwayam will leverage our strength in distribution and complement and supplement our RMS offerings. Moving on to the real estate vertical, 99acres. In 99acres, billings in Q4 stood at INR 71.7 crores, a growth of 41.5% year-on-year, while revenue stood at INR 50.1 crores, a decline of 11.1% year-on-year.
For FY 2021, billing was down 13.6% compared to FY 2020 and closed at INR 184.8 crores, while revenue declined by 23.8%, and we closed the year at INR 173.8 crores. The operating loss for the quarter stood at INR 15.6 crores, while EBITDA for the full year stood at a loss of INR 22.2 crores against a profit of INR 8.4 crores for the last financial year. Cash profit for 99acres during the quarter, however, was INR 5.7 crores against a cash loss of INR 3.8 crores last year. In Q4 at 99acres, new homes, resale, and commercial showed strong sequential business recovery compared to Q3. Rental recovery was a bit muted, though. In Q4, our expenses were high by 20% due to increased brand marketing spends and the launch of a new marketing campaign. Daily fresh owner listings posted on the platform grew 14% year-on-year in Q4.
Recovery in broker listings lagged a little behind recovery in owner listings. All India brand top-of-mind share continued to be strong, and traffic in Q4 grew 11% quarter-on-quarter and year-on-year. Our responses on the platform grew at an average of about 35% in Q4 versus Q4 of last year. Response meaning inquiries to listings. Going forward, we expect the share of online in the overall spend of advertisers and main developers and brokers to go up further post the second COVID wave subsiding and lockdowns easing out as advertisers further realize the inherent cost efficiency of digital versus print media and hoardings. Once the lockdown restrictions are fully removed, we expect to see a broader recovery on all fronts, listings, traffic, inquiries, and revenue. Like I said, April and May for 99acres were affected because of the lockdown and because of COVID-2 .
Since then, traffic has bounced back in the month of June, we'll have to wait and see what happens going forward. We continue to invest aggressively in improving our core platform experience in all our business segments within 99acres to strengthen our competitive position further. Moving on to the matrimony business, Jeevansathi. In Jeevansathi, billings grew 12.2% year-on-year in Q4 to INR 26.7 crores, and revenue grew 14.4% year-on-year to INR 25.9 crores. Operating EBITDA losses stood at INR 21.4 crores in Q4 of 2021, up from a loss of INR 18.8 crores last year. FY 2021 billing grew by 15.2% year-on-year to INR 100.4 crores for the full year, up from INR 87.1 crores in FY 2020, and revenue grew to INR 96.9 crores from INR 84.7 crores in FY 2020, an increase of 14.4%. FY 2021 EBITDA loss stood at INR.
95.6 crores against a loss of INR 63.2 crores in FY20. Cash loss for Jeevansathi during the quarter stood at INR 21.9 crores, up from a cash loss of INR 18 crores last year in the same quarter. In Q4, growth momentum continued despite the slowdown in March due to rise in COVID cases. The three differentiating features on the platform, like online verification, video calling and video-based online meetups, kept driving user engagement. The app rating on the Google Play Store continued to be one of the best in the category. Jeevansathi continues to consolidate its position as it gets into a position of strength in the Hindi-speaking markets. Moving on to education vertical, shiksha.com. In Q4, billings in Shiksha grew 45.1% year-on-year to INR 19.4 crores, while revenue grew 16.8% year-on-year to INR 15.4 crores.
In FY 2021, billing and revenue grew 12.7% and 6.9%, respectively, and stood at INR 58.6 crores and INR 57 crores respectively. EBITDA stood at INR 30 lakhs versus a loss of INR 1.4 crores in Q4 2020. Full year 2021 operating profit stood at INR 4.1 crores versus a profit of INR 1.2 crores in FY 2020. Cash profit for the quarter stood at INR 4.3 crores, up from a cash loss of INR 1.2 crores in Q4 2020. We are continuously putting more and more efforts to get more and more relevant content on the platform. Talking about our strategic investments. Our investee company, Zomato, has filed a DRHP with SEBI seeking approval for a proposed IPO. Thank you. That's all from us. We are now ready to take any questions that you may have.
Thanks, Hitesh Oberoi. We'll now begin 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 queue.
Okay, the first question is from Pankaj Kapoor from CLSA. Pankaj, go ahead and ask your question.
Yeah. Hi, thanks for the opportunity. I have two questions. First, on the bookings, especially in the recruitment business, does it also have some element of price increases or was it all volume-led? If you can quantify the price component, if there is one. Second, on the cash balance, you still have almost the entire fund that you raised last year from QIP in the books, plus in the next few months, you will probably get another INR 750 odd crores from Zomato IPO. How are you thinking about it? Do you plan to keep it for some more time and wait for a larger acquisition? Maybe change the investment style and go for late stage funding? Are you contemplating maybe even returning it back to the shareholders? Any color on your thought process there would help. Thank you.
Yeah, let me answer your first question. Q4 saw a broad recovery in recruitment. We got a lot of old customers back into the system, customers who had not renewed earlier. We were, of course, able to upgrade our existing customers also because recruitment actually picked up in Q4 in a lot of segments. Normally what happens when activity also picks up is that you tend to give lower discounts. That may have also helped to some extent. Did we take a very aggressive price increase in the quarter? The answer is no. We did roll out some new products for a certain set of customers, but the contribution of that to the growth in Q4 was minimal. To answer your other question on resource allocation and so on, and what we intend to do with the cash. Well, see, our strategy remains the same.
We continue to invest in different sort of parts of our business. The four businesses internally, of course, are not really generating a lot of cash, but we continue to invest. We want to invest aggressively going forward in both Jeevansathi and 99acres, and if required, in Shiksha.com as well. We have been making a lot of investments in adjacent areas. We acquired Zwayam, for example, this quarter. We would like to do more such acquisitions going forward in the spaces in which we operate. That's the second bucket in which we are investing. Obviously Info Edge, AIF continues to invest aggressively in startups. Yes, we will continue to scout for bigger acquisitions as well. There, we are likely to acquire maybe one company every two or three years.
We continue to analyze and look at all opportunities in all the spaces we are operating today, jobs, real estate, matrimony, education. If we find something interesting and which is also available at the right price, then of course, we will press forward with it. To answer your question, the idea right now is not to give cash back to the shareholders, but to utilize it for growth in all the sort of various buckets I mentioned going forward.
The next question is from Pranav Kshatriya from Edelweiss. Pranav, go ahead and ask your question. Pranav, you are on mute.
Yeah. Thanks for the positivity. My first question is regarding this pandemic and the phase II of the pandemic. Has there been any impact on Naukri business for non-IT verticals because of this? For other verticals also, if you want to call out for any specific impact which has happened.
Yeah. Surprisingly, COVID- 2 has had no impact on the overall Naukri business. In fact, we were taken a bit by surprise. It impacted the 99acres business, like I said, because the lockdown meant that people could not go out to look for houses. Hiring has moved online. Hiring is now all digital. Interviews are happening at home. In fact, it's become easier to hire now because you don't even need to travel for an interview. COVID- 2 has had no impact on Naukri till now. Even job seeker metrics continue to be healthy, recruiter metrics continue to be healthy. Of course, there was a lull in hiring for some time in between because maybe there was a point in time when a lot of recruiters were down with COVID, a lot of candidates were down with COVID.
On the whole, we've not seen any major impact of COVID- 2 on hiring or at least on our business. Yes, hiring has been mostly IT and ITeS led. Those sort of segments or those industries have grown much more rapidly for us than the non-IT sectors, which have been impacted a lot more by COVID.
Okay. Thank you. That's it.
Yeah. The next question is from Sudheer Guntupalli from ICICI Securities. Sudheer, go ahead and ask your question.
Yeah. Thanks, Hitesh. Just want to check if you want to call out any one-offs or so in employee expenses or other expenses during this quarter because it looks a tad higher than our usual run rate.
Well, we gave an increment to some employees in, I think, the H2 of last year. Partly it may be that, and partly, you see, we were not expecting the company to do so well in Q4. Almost all our sales teams met and exceeded their targets. There was maybe a huge variable payout as well in Q4. That may have accounted for the part of the increase as well.
Is it a fair understanding that this would have otherwise been spread out over four quarters and probably it would have gotten accounted for in only one quarter?
Not over four quarters, because, see, the salary increase is what it was. Many people in the company got a salary increase. What you saw, I mean, what there as asked is only the salary increase for that quarter. Also, the variable payout is also fully for that quarter. It's not as if there was a variable payout which was made for the entire year. Yes, because the way our variable pay plan works is that if you exceed your targets, you end up making a lot of variable. Most people must have made 110%, 120%, 130% of what the target was. On the other hand, in the previous quarters, because most people ended up doing less than their target, they may have ended up with 70%, 60%, 80% of what was their targeted variable.
Yeah. May I just add to that, just to help you understand it better? When COVID first came in March 2020, and the economy virtually shut down, we did not let go of any people in April 2020, but we deferred the increments. Those increments were given, I think, in December, if I'm correct. They were not given with retrospective effect. When were they given, Chintan?
December 1st we gave.
December 1st. They were paid prospectively, not retrospectively.
Yeah.
Therefore, that tended to depress the people payouts in the first nine months of the financial year because we were unsure what will happen. When business began to come back, we gave the increments, but prospectively. The increment that should have happened in April actually happened for some people in December. For some people, it didn't happen in December. We were being very cautious.
Yeah. Got it, sir. Hitesh, just one more question on recruitment. You alluded to the fact that surprisingly, COVID second wave had not much of an impact in the June quarter also. Is it fair to expect that we have been seeing a period of depressed white-collar hiring in the country for some time now, even before the start of COVID and over the last 12-14 months also. Is it fair to expect that we are kind of looking at a strong recovery in the white-collar space? Probably one of the green shoots of that is the fact that despite such a lot of panic and fear around second wave, it has not really impacted our March/June quarter things. Is that a fair way to look at it?
Hard to say what is going to happen going forward. What I hear anecdotally from our sales team and what we are seeing in our company also, if there is any indication, hiring in at least of people with digital skills and IT skills is back with a bang. I think the digital transformation story is playing out as we speak, and every company wants to hire digital talent. Attrition rates are moving up across companies. Salaries are going up like crazy for people with the right skills.
This is not happening in all parts of the economy. Like I said, it's only in some parts, in some industries, where we are seeing this. I don't know if this is going to sustain, but right now it's almost impossible to hire people in this market. Is that right? In the digital world. In the non-digital world, things are not as loose.
Got it. Just one last question. Maybe an extension of one of the previous questions. We already have around INR 3,600 crore cash on the balance sheet, maybe more than sufficient for any of our future M&A/early-stage investment options. How do we look at the monetization plan from, let us say, a Zomato listing standpoint? Are we going ahead with that monetization of that stake? We already have INR 3,600 crore cash on the balance sheet. What is the thought process behind monetizing that stake in Zomato at this juncture?
Just one point I want to make, INR 3,600 crore is not a lot of money in the digital world anymore. You routinely hear of companies in the digital world making $200 million, $300 million acquisitions every day. Of companies you've not even heard of. I'm just letting you know that if you want to make a big acquisition, this money may not be enough. Sanjeev can talk about what we want to do on the Zomato stake. Sanjeev, you're on mute.
Sorry. Look, it's there in the DRHP that we will monetize up to INR 750 crores worth of stock. We stay with that as of now, up to INR 750 crores. We will, of course, the final RHP that we file. Let's see what happens there.
Sure, sir. Thanks. That is it from my side on all this.
Next question is from Satvik from Cerulean Fund. Satvik seems to have dropped out, so I'll take next question. Next question is from Vivekanand Subbaraman from Ambit Capital. Vivekananda, go ahead and ask your question.
Hi. Thank you very much for the opportunity. I have a couple of questions. One, Sanjeev, you mentioned about a month and a half back that a large part, I think 20%-25% of your employees were also impacted by COVID.
Yes.
Does this second wave, the suddenness and the sharpness, does this change your outlook towards just having one office in NCR? Would you want to change the way you operate? That's question one. Secondly, with respect to the previous question on Zomato, Sanjeev, I heard that you mentioned there's an option to monetize up to INR 7.5 billion worth of stake.
INR 750 crore.
Thanks. INR 750 crore. Does this necessarily mean that you will need to go ahead with it or could we potentially not sell?
We have no further announcement to make on this right now. It's in the DRHP that we will monetize up to INR 750 crores. Let's see how the IPO proceeds.
I don't know if I got the first question, but basically, you were asking whether we would intend to go back to working from one office in Noida, right?
No, my question was more about your operations being focused on one city, NCR. Both of your central teams sit there. Is there a plan to possibly change the way you operate, given how badly NCR was impacted during the second wave? I'm just asking the same question that I asked some time ago on tech hiring being so difficult in NCR, probably. Will you consider operating from other cities like Bangalore soon?
Got it. We have close to 4,500 employees, and many of our employees we have on sales roles, so we have sales of over 40 cities. I think close to 1,500 people or maybe 12, 13, 1,400 people operate out of these cities, and these offices in these cities. In NCR, also, we have multiple offices. We don't operate out of one physical location. Of course, for the last 16, 18 months, we've been operating from home, and that is what we intend to do for the next few months as well, till this COVID is behind us. It's had no impact on our business. We're doing okay. We see no reason to go back to working from office in a hurry. Will we hire remotely? Answer is maybe yes, because the way we are working seems to be working out well for us.
Now, will we be very aggressive about remote hiring? Maybe no, to start with, but we will experiment for sure with remote hiring. Take Zomato, for example, the company we acquired, they're based out of Bangalore. Now we have a base in Bangalore as well. If we want to expand our operation in Bangalore, we can always add more people in Bangalore to it.
Okay, understood. Thank you.
The next question is from Neha Dhandhania. Neha, go ahead and ask your question.
Thank you so much for the opportunity. My questions are in line with the online matchmaking business that you have, Jeevansathi. Where do you see the business going forward from here? Do you see the business being profitable in the coming years? What are your current marketing spends?
The plan is to keep growing Jeevansathi at 20%+ per annum for the next few years. This will require investment, substantial investment in marketing if we have to gain share. We believe that we have to keep investing in the business and mostly marketing for the next three or four years at least. That's the current plan. Last year we lost INR 90 crores, the year before last we lost INR 60 crores. Going forward also we may have to, because the market is very competitive, we are number three. Number two in the north, but number three nationally. If we have to gain share, then we have to match the marketing spend of our competitors, who today are spending INR 120 crores, INR 130 crores a year on marketing. If we have to gain share, we have to spend at least that much, if not more.
Do you have plans for consolidations in this market, and where do you see yourself?
No, it's a three-player market, unfortunately, and therefore, no player makes a lot of money, and we are all fighting each other, and prices are also suppressed, depressed. Pricing is also depressed. Ideally, it makes a lot of sense for players to come together. Whether it's doable or whether in the next one or two years, it's hard for me to say. We are open to the idea, but it may or may not be practical and feasible.
Will you be on the buying side or the selling side?
Yes. We would rather buy themselves.
Okay. Thank you so much.
Thank you. Next question is from Krishna from Capitalmind. Krishna, go ahead and ask your question.
Yeah, hi. Good evening, and thanks for the opportunity. I just have one question. On our balance sheet, we have INR 2,329 crore categorized as other financial assets. Can you throw some light on what these assets are actually?
These are the FDs lying with the banks, more than one year with original maturity. One category is up to three months, second is 3-12 months, and third category is beyond one year.
Okay, these are essentially FDs only.
That's right.
Cash equivalents. Great. Hitesh, any light on PolicyBazaar IPO, when can we expect it? Maybe year-end or next year?
Chintan, want to take that?
PolicyBazaar is preparing themselves for the IPO. When they will have, I think that's a little far off. board has not really approved any plans. We can certainly tell you that they are preparing for it. As you know, that IPO preparation takes its own amount of time. I think they are going through that. As and when we are ready for that, and the RHP is filed, I'm sure there will be an announcement on that.
Okay. Thanks for the opportunity.
Yeah. The next question is from Mayank Babla from Dalal & Broacha. Mayank, go ahead and ask your question. Yeah, please go on.
Thank you for taking my question. My first question is about the other expenses. Quarter- on- quarter, there has been a sudden spike from INR 15.7 crores to INR 22.5 crores. Could you please explain that?
Sorry, the other expenses?
Yeah. On the standalone basis.
Sorry, can you repeat the question?
The other expenses line.
In the standalone results, yeah. Yeah, quarter-on-quarter increase.
The special other expenses have gone up substantially compared to last quarter.
Yeah.
Yeah. Okay.
Hello?
Yeah. Just give her a minute.
Yeah. Can I go ahead with the second question?
Yeah, please go ahead.
Hitesh, my question was around, for us, Zomato and PolicyBazaar, it took 8-10 years of patient capital to become so big. Now, going ahead over the next 8-10 years or 15 years, which segments or which sectors are you seeing potential in or where you're seeing it can be the next Zomato or PolicyBazaar?
Sanjeev, you are on mute.
May I take that question? Look, we don't do it top-down. We don't do sectors. We prefer to see companies and entrepreneurs, and if we like something, we invest in it. We like to see what's bubbling up. We do it bottom-up. We believe that's the best way to invest. As opposed to pre-deciding, hey, we've got four classified sectors. We don't have automobile. We got to do it. That's not the way we do it.
Okay.
If I talk about companies that are promising, I think in the direct investments that Info Edge has made from its balance sheet to our subsidiary balance sheets, there are, I think, two or three companies that are looking promising. Of course, they're much, much smaller and much, much less valuable than Zomato and PolicyBazaar right now. These would be a Gramophone, a ShopKirana, a Shipsy, a Business. We are hopeful that one or two more may emerge, which will be really valuable. Look, with early stage, you can't say for sure. We would love all five or six to make it, but our past experience tells us that, look, if you've got six promising, in all likelihood, not all six will make it. Wait and watch. We continue to support, continue to invest, continue to work with them.
As far as the AIF portfolio is concerned. That's very new. It's too early. It's still emerging. Yeah, we've got some promising investments there also, but it's emerging. As far as the investments in the strategic space are concerned, which is investments in jobs, in real estate, in Matrimony, and in education classifieds, the consideration there is not necessarily to build unicorns or invest in unicorns and have this great financial upside there. I think a big part of that intent would be to complete your offering, to build your moat, to tackle a new segment. You've got to look at it from that strategic prism. For example, the Zomato acquisition, on its own may or may not become a unicorn or a separate business, but does it complete the offering of Naukri?
For example, does it make your jobs product much more useful because it's an enterprise response management service? Maybe it does. What does iimjobs do? Does it complete a gap in your portfolio? Yes, it probably does. Will it become a INR 1,000 crore business on its own? May not be. Does it cover a gap in the market, builds a moat around Naukri? Answer is yes, possibly. The prism for evaluating strategic investments is different from merely valuations.
Okay. Thank you, sir.
The expenses have increased because of CSR spend, which has increased, and also for bad debts, basically, primarily.
Okay. Thank you, sir. Thank you.
The next question is from Kaushal Shah. Kaushal, go ahead and ask your question.
Hi, am I audible?
Yeah, go ahead.
Do you look any competition coming from LinkedIn or any big thing in professional networking in your recruitment vertical? Again, one question, as Hitesh said, that you are not willing to give back any money via dividend. Any bonus plans on your list? Thank you.
LinkedIn has been around for maybe 12, 14 years. We've been competing with LinkedIn. Has anything changed on that front? Has anything material happened on that front which you would want to report? The answer is no. We continue to compete with LinkedIn like we were competing. We've been competing for the last few years.
Okay.
As far as the bonus issue is concerned, look, we haven't discussed it really, but my personal sense is that, look, you would be prepared to give a bonus when your EPS is high enough and there's predictability. Now, given COVID and the uncertain environment, there is no predictability. Therefore, which is why we haven't considered it so far. It's not even been discussed.
Okay. Thank you.
Next question is from Vivekanand Subbaraman from Ambit Capital. Vivekanand , go ahead and ask your question.
Yeah, hi. Thank you for the follow-up opportunity. Hitesh, Sanjeev, would you like to share any update on the recruitment areas or segments where we are not that dominant, especially the non-IT side or BFSI? If you could give us a bit more qualitative color on the kind of customers that iimjobs and Hirist have signed on. That's question one. Second, we were talking about the management reorganization, I think in FY 2020 end or mid of FY 2019, with respect to the real estate vertical, where we wanted to focus on few new revenue segments. Any update on that?
Yeah. Okay, let me take your question on iimjobs and Hirist and segments where we are not as strong. See, basically, Naukri is a dominant player across segments. Whether it's IT companies or non-IT companies, every company uses Naukri to hire. IT companies, of course, hire a lot of people, and they see a lot of value in Naukri. A lot of hiring is skill-based. Where LinkedIn comes in, is where LinkedIn is used for more passive hiring, of hiring seekers who are not looking for a job, where Naukri used to be used more for active job seeker hiring, a lot of job seekers who are looking for jobs. That continues to be the case. Where iimjobs made some inroads was in management hiring. Hiring of management graduates from good institutions, premier institutions.
Which companies, for example, if you take some of the top companies in India, they hire a lot of the best from B-schools. They hire from those schools. They do a lot of campus hiring. They hire very high-quality talent from the IMs, from the other good business schools. That's where Naukri was lagging a bit. See, while Naukri had all these jobs and they had all these job seekers, because we had a lot of them, the premium guys were getting lost, right, on the platform. iimjobs had built a good brand in this segment. We managed to use iimjobs to get a lot of these customers who are not using Naukri aggressively for hiring this kind of talent into our fold. Right? That's been the effort till now. Hirist is still tiny, okay?
Hirist is still very small compared to iimjobs and compared to Naukri. It's emerging as a decent tech brand. Again, our intention will be, but we'll have to see how it plays out in real life, will be to position Hirist as a premium tech hiring brand unlike Naukri, which is like a mass tech hiring brand. Let's see how that goes, early days on that front.
The second part of the question.
Second was on, I think, 99acres's management reorganization. Yeah. Earlier, we used to look at 99acres as one business with one team managing everything. Over time, we realized that we are actually in maybe three or four different verticals in the real estate business. The jobs, the retail vertical is very different from the commercial vertical, which is very different from the new home vertical, which is very different from the rental vertical. What we've done, at least for the time being, is we've reorganized the product team at least. We have separate teams working on each of these verticals. Separate platform teams for each of these verticals. We are now moving towards reorganizing the engineering team also, platform-wise or vertical-wise.
Right now, we have one sales team which sells to all our customers, but there also, we have separated out the new home piece to a large extent, so that we have a separate set of people who work on customers who sell new homes. It's largely done. We are 60%, 70% there. We continue to, of course, have one brand, 99acres. We are not launching separate brands right now. That's not the intent. That's where we are on that journey.
Thanks a lot. Any comments on the debate, this is a perennial debate with respect to 99acres, the debate between remaining a classified player and a full-stack operation? Secondly, do you have anything to report with respect to the collaboration with some of the investees that operate in the same area? You had made those investments a couple of years ago.
Yeah. Full-stack versus classified. Of course, classified is our core business, and we are primarily a listing and marketing platform, and that's where 95%, 98% of our revenue comes from today. About maybe 100% of our revenue today comes from services we provide to owners. Yes, the plan is to grow this piece over time, faster if possible, to provide more and more assisted services to owners. Are we looking to go the whole hog and become brokers? Definitely not in the resale segment, definitely not in the rental segment. That's not the current plan. Could we invest in companies outside which do stuff like this? Maybe we could. We experimented with Allcheckdeals a few years ago, and we then shut it down. Allcheckdeals was supposed to be a channel partner for selling new homes.
It did not work out for us at that point in time. Could we revisit that idea? Maybe we could at some point in time. Let's see how it evolves. Not saying no. We've invested, like you said, we've invested in a couple of startups in the real estate space outside. TEAL is one of them. It's a real estate analytics company. We're trying out some integration with TEAL right now in early days, so nothing much to report on that front. The other investment we made is in Rahul Yadav's company, but that is very recent. Again, not much to report on that front.
Thank you very much. Any more questions, please? This was the last question we had for today. The next question is from Hari. Hari, go ahead and ask the question.
Hello, sir. Thank you for taking my question. My question is on Jeevansathi. This year, we have, I think, burnt INR 93 crores. Last year, we burnt INR 65 crores. If we sum up for the last five years, I think we have burnt around INR 220 crores or INR 230 crores. I was just wondering, from the outside in, it doesn't seem like a super exciting market that's growing very quickly. What is it that we are seeing in this market that we are continuing to invest so much money here?
Well, see, we are a really strong player now in the north. We are the strong number two in Mumbai. We have close to 40% share. Why we are spending this much money right now is to gain share. We've gained share over the last two years. We believe that if we keep investing this kind of money for the next two, three years, we become a leader in the north. Hopefully, at some point in time, there'll be consolidation in the space. That's the idea right now. Why are we spending this much money? Because our competition is also spending a lot of money. We are also forced to spend. It's a competitive market. If we don't, then of course, then it's like a sitting market.
I do believe that this market can grow, continue to grow at 20% per annum or 15%, 17% per annum for the next few years. If there was to ever be consolidation in the space, then the margins also could be healthy for the players who are left in the business.
Understood. That's super helpful. Thank you.
Next question is from Swapnil from JM Financial. Swapnil, go ahead and ask your question. Swapnil, you are there?
Hello, can you hear me?
Yeah, please go ahead.
Yeah. A couple of questions, actually. One is with respect to the merger of Finance with the standalone business. Is that complete? Going ahead, will you be reporting the numbers as a merged entity? Second question is a bit on your investment strategy with respect to the investing portfolio. In the food delivery space, we have Zomato as an investment, and you also have invested in DotPe. They address the same problem actually, which is delivery of food to the customers, and they are in a way competitors to each other. Any thoughts on any rationale behind these investments, and how do you look to these investments from your perspective? Thank you.
Can you repeat the first part?
Let me answer the first part. We are in the process of carrying out the legal integration. We are in the midst of it. We have had our shareholders meeting and creditors meeting. The second motion is also passed probably somewhere in July mid or maybe in August, I think the legal merger should be complete and after that it will become part.
As far as DotPe is concerned, look, it is not just a restaurant billing, itemized billing, remote billing app, contactless billing app. It's horizontal play. One use case is restaurants, but there are going to be several use cases. As a company evolves, we'll see more and more of this happening. Yes, what has caught the media attention, and there have been a couple of articles, is because NRAI is pushing DotPe and promoting it as an alternative. No, DotPe does not deliver. We do not have a delivery fleet. DotPe is a contactless billing app, and it will deliver the menu card, and you can do it.
Thank you.
Thank you. The next question is from Nancy Desai from Marcellus. Nancy, go ahead and ask your question.
Sorry, sir, this is Salil from Marcellus. Thanks a lot.
Okay.
The question is, any thoughts on how the blue-collar hiring space is shaping up? If, say, the two COVID waves had any impact on the way hiring takes place in this segment, and what would be your strategy to play there?
We've been test marketing product JobHai in the NCR market for the last few months. Results have been encouraging. Early days, but clearly what has changed in the last few years is that everybody has a smartphone, and as people have become digitally savvy. It's very easy to get job seekers in the blue-collar space onto your app, onto your platform. The harder part is actually getting the SMEs to use the platform to hire, which is what we've been working on. I think that will also sort of become easier once SMEs also start digitizing, that will also become easier. I think fundamentally, now, is there a viable business there? Is it possible to make money? Time will tell. Yes, I think the market is ready for blue-collar business now. Of course, there's a lot of competition.
Like I said, we've been test marketing in Delhi, NCR. We are happy with the results. Right now, we're not focusing on revenue. We are basically trying to get the product market fit right. Once we are confident, then we will roll it out nationally as well, which I expect to happen over the next few months.
Just to clarify, you're saying the supply side is fine, is the demand side that is where the problem is?
Yes.
That's an interesting problem to have. It's a better problem. Great. Thanks a lot.
The next question is from Manik Jagtiani. Please go ahead and ask your question, Manik.
Hi. Good evening. It's very nice to talk to all of you again. There was just a small question. It's probably a little off the real subject. There's the whole retail market of a lot of investors who would like to invest in Info Edge, but at INR 5,000, it's not really within the reach of a whole lot of retail investors. Has there been any plan or is there any idea at all that you would like to split the stock and make it more accessible to the broader market?
Okay. We haven't discussed this, look, thank you for the suggestion. We will certainly at least discuss it. I'm not saying we'll do it, at least we'll discuss it. Whether it's a bonus or it's a stock split, we'll have to just figure out or maybe do nothing. Maybe let's see. Thank you for the suggestion.
Thank you.
Next question is from Arnav Kapoor. Arnav, go ahead and ask your question.
Thank you. Can you hear me?
Yeah.
Thanks for the opportunity. I just wanted to understand, given that we have so many B2C and also B2B businesses, and given the trend around super app, which has been working in China and many corporates and large corporates in India are trying to replicate. Given that we work on the spectrum of basically the entire life cycle of a human being, do you see an opportunity to integrate them, even though they're investments in different companies and strategic investments and some of them are our own, to build that kind of an ecosystem where you are able to monetize cross-sell, upsell across the various businesses? That's it. Thank you.
No, to answer your question, there is no such plan. Given the nature of our businesses, which are sort of life events, actually, in the lives of most people, it's not as if people are on our platform every day of their lives or one of our platforms every day. We don't think they lend themselves to the idea of a super app. We would therefore rather let each business figure out its own strategy rather than distract them and get them to work together at the back end. We've discussed it several times in the past, but it's not on the agenda. By the way, in my view, it's very, very hard to build a super app. Anyway, not just for us.
Thanks. I totally agree. There could be just opportunities in cross-selling, like in insurance and other things that you can come from building a database. Thanks so much. The other question was answered on-
Actually, I just wanted to add. See, in the past, we also thought you can sell, you know in your resume form in Naukri who's single, who's married, because you pick up that data, maybe you can sell given services. When we actually had to promote it, when we hired June 31st. We tried to promote it, people got mad at us. Although we technically are doing it, we have the rights, we stopped doing it. The truth is when you're looking for a job, you're not looking for a house and you're not looking for a spouse. Even though your demographic may be the same. It's about what you're doing when you're looking for it. Trustingly is harder than it sounds, is what we have learned.
Thanks for that answer. Thank you.
In case there are more questions, please raise your hand. That was the last for the moment. Vivek, there are no more questions coming in, so do you want to take it ahead?
On behalf of Info Edge, we conclude.
One question has come. Sorry. I may take it back, yeah. Question is from Ajay Tyagi. Ajay, go ahead and ask your question.
Hello. Yeah, just one quick question. We've been hearing about the fact that even the private sector will have to post their jobs on a government portal now. Can you throw some color on that? Is that expected to have any impact on our business?
Not really. We've been hearing stuff like this for the last 15 years. It's not really materialized till now. Of course, every state has its own sort of plan. We continue to engage with some of these governments. Now, it's possible that some states may take it more seriously than other states. Right now, we don't see any impact on our business. I guess if they do it, they'll probably do it with blue collar jobs.
Ajay, where did it come from?
I think it was there in some of the newspapers recently.
Okay.
Over the years, we've engaged with many state governments on subjects like these. Nothing ever materialized. My sense is, whenever we engage with them, they're more focused on the idea of blue-collar job seekers and helping them get jobs than on white-collar job seekers.
Sure. No, it was, I think, in one of the dailies. Maybe, Sanjeev, I'll forward that to you just to see if it's.
Yeah, thanks so much.
One of those things which has been happening on and off, or is there anything more tangible?
Actually, in many states, there already is a law that if you have any vacancy, it's mandatory to notify the local employment exchange. Nobody does it because they don't see much value in doing it, and the government does not go after them. That seems to be an archaic provision, which is there but is not used or implemented. Different states are different, and who knows? Tomorrow is a new day.
By the way, in the past, we also helped state governments put some of these platforms together. I don't want to name them, but we worked with a couple of them to help them also. For some reason, these things are never taken up.
Right. Sure. Thanks.
We have one more question from Zara at Vantage. Zara, go ahead and ask your question.
Hello.
Yeah, please go on.
Sorry, I was on mute. Can you hear me?
Yeah. Please go on.
I have a couple questions. When you think of your core business, is it just the verticals you're in right now, or are you open to the larger universe, if you will, of the classifieds business? Are you open to other segments?
Yeah, right now, we are mostly focused on the segments we are in, which we think are very large. Jobs and careers, for example, is a large category. We mostly play in the white-collar job seeker space. Yeah, now we need to look at blue collar, we need to look at ATSs, recruitment software, recruitment services. Right now, most of our business comes from the white collar sourcing space. Similarly, 99acres, like I mentioned earlier, we are now beginning to look at 99acres as four different verticals. The rental business is very different from the resale business. Resale business is very different from new homes. It is very different from commercial. In Shiksha.com, which is our education business, we started a study abroad business within the Shiksha.com business, which is a separate game altogether.
I think in the verticals we operate, there are many opportunities which we would rather go after first. Yes, but we are not closed to the idea of starting a fifth vertical, especially if we understand the space. Classified is something we understand and appreciate, and we know we can run classified businesses. If a good opportunity comes our way in the classifieds space, we will definitely evaluate it.
If you were looking at it, when you say that's your specialized skill, if you will.
Yeah.
How does that actually translate for a new space, if at all it had to? If you are looking at a space, what are the sort of necessary conditions, if you will, for a classifieds business to succeed?
Sorry, you want to repeat the question?
No, in fact, most of the businesses that you're in your classified space, they are growing at a certain scale, at a certain rate, if you will, and they've all always been sort of markets of scale, right? It's not like you're able to rush the pace of growth beyond a point.
Yeah.
Organic and a nice slow and steady, not slow, but relatively speaking, compared to the size, it has been your style forever. I'm just sort of trying to understand just that and is it inherent in the nature of classifieds for it to not be pushed to grow beyond a point? Also, like I said, what would be the necessary conditions, if you will, when looking at another space?
Every category is different. Let's take jobs, for example. If India starts growing at, whatever, 70% per annum for the next few years, the Naukri business would start growing at 30%-40% per annum, right? We are already seeing that kind of growth, for example, in IT. IT markets are hot right now.
Right.
It's not as if classifieds business cannot grow.
No. I've been sort of tracking your company since you listed at some level. I understand that. I'm just trying to sort of understand. It does not constrain your ability to grow in other areas, is what I'm trying to get at, and therefore, if you're looking at other markets.
We are not actively considering entering other sort of verticals right now. Like I said, our focus, we are more focused on entering adjacent verticals, adjacent to the ones we already operate in right now. We would rather do a careers platform than do a car portal. We would rather spend more time and money on building a rental platform inside 99acres than something else.
When you say then, why are you rejecting it? Is it simply because you feel that the bandwidth you have is adequate only to cater to what you're in right now? Is it because, you keep saying cars, but cars is probably more sort of from a capital allocation perspective is not the kind of business you'd be in. I'm just wondering if there's an evaluation criteria there or is it just, no, let's stick to adjacent stuff.
No. Like I said, we're not closed to the idea. Two or three things have to happen, have to sort of be in place before we start a fifth vertical. One is that the addressable market should be large. We don't want to enter into too many small markets. Two, it's very hard to displace an incumbent if the incumbent is already very strong. We would not want to enter markets where there are strong players already, right?
Any space we enter into, we should have something unique to offer to the customer. Something unique, something relevant which others are not doing. Otherwise, it doesn't make any sense. The truth is that there are lots of startups today, and they're all trying a bunch of things. Most regular or sort of categories are already taken. They're already established players, and they've been at it for a while, and they're pumping in tons of money.
Yeah.
For us to enter a new category, like I said, the offering has to be unique, the market has to be large, we have to be early. There should not be too many established players because that makes it virtually impossible. These criteria have to be met before we start a fifth vertical.
Okay. All right. Fair enough. That's helpful. Thanks. Just on the other side, on the investment, the AIF fund, just wondering if this is, I know this again, very early days, and you've talked about how you need patient capital and it takes 10 years to build a business, are you all really looking at possibly having a venture fund business as a vertical sometime in the future? Take us out.
The AIF is a venture fund business. It's just that we've only got two LPs.
Sorry?
We've only got two LPs. That's Info Edge and Temasek.
Right.
As of now, the thinking is that we are unlikely to go down the path of raising larger and larger funds with 20 LPs and 10 LPs and 50 LPs. We're happy with one like-minded LP, in addition to Info Edge, where both are patient, both are perpetual capital, and both have a long-term view in India. If you look at historically, exits in early-stage investments in India have been hard and difficult. If you leave out Flipkart, strategic sales have not happened at any kind of valuation which will give investors a lot of joy and will return the whole fund or something, right? That doesn't happen.
Right.
From early stage, from first check to IPO, often takes 12, 13, 15 years.
Right.
We were the fastest at six years, and we were good and lucky. I think MakeMyTrip took 10 years. I think JustDial would have taken about 17, 18, 20 years. I think IndiaMART took about maybe 20 years. I think Matrimony took 20 years. You've got to have really patient capital. If your regular venture fund is 8+2 years, it doesn't cover the distance from first check to IPO. Therefore, venture funds in India, very many of them have had a hard time, if they invest early stage, in getting great exits. That's not so easy. Which is why our fund is 12+2 years. Which is why our fund only has two LPs, and both have a long-term view in India.
Tomorrow if you don't want to exit at the end of 14 years, you can just devolve the shares to the LPs, if the assets are good
No, I get that, Sanjeev. I just wanted to know what happens five years later. Just if at all there is or this is still just the first fund, and you will see how it plays out. Is there some kind of within the framework that you've created in terms of 8+2 is not enough, on your terms. Is there an intent to then venture into that space?
We have already ventured into the space.
No, I mean in terms of growth.
Yes. Well, look, the intent is obviously we will like to do more funds should the experience be good.
Okay. All right. Fair enough. All right. Thank you. That's it from my end. Thanks.
The next question is from Arpit Shah from Sterling. Arpit, go ahead and ask your question.
Hello. Sir, this is Amit Jaiswal here for Arpit Shah. My question is about the reinvestment. We're sitting on INR 3,000 crores of cash on books, and we've not been able to reinvest. The opportunity corona now coming to an end, hopefully, and yet we're not able to reinvest the cash flows. The interest that we would be getting with 5% yields about INR 150 crores. We'll be getting INR 750 from Zomato. Your cash next year will be near INR 4,000 crores. Keeping it in FDs is not good capital allocation. What is our capital allocation strategy and how are we controlling our FOMO when other people are making so much money?
Chintan, you want to address that? I think Hitesh already addressed it, but let's have your view on that.
Look, cash has always been central to our strategy. We can use it as a defensive strategy. We can also use it as an offensive strategy. Last year when we went ahead and did the QIP, the thinking about raising money, about trying to do an inorganic growth has always been there in past two, three years inside the organization. We have been thinking about it. We have been preparing ourselves for it. Accordingly, it was not so much about COVID, but that thinking was already there. We went ahead and we raised money. We are still open. We have sent out the messages saying that, yes, we do want to look at the large acquisition.
If that happens in any of the core verticals that we operate in, we are happy to look at it. We are also happy to look at some of the strategic minority stake in adjacencies or any of the differentiated business model which can help us to readdress the market that we are addressing or create some kind of synergies with the product that we are offering or create more moats for our businesses. We are open to look at that as well. As you know that this type of strategic investments or acquisition does take time, and we have been saying that we need to be patient about it. That's what it is all about. Certainly, we are open to look at the ideas, and we are open to look at the inorganic growth opportunities. That's how we are keeping the capital.
You can turn it off.
Chintan, just one question. Since we've seen companies like BYJU'S on the EdTech space, which you are present in, they have scaled up well. We've got so many startups which are something which is outside your space, something like Dream11. What is stopping us to buying any of these unicorns as well? What is the thinking behind it? Do we want to make this INR 50 crore, INR 100 crore acquisition, or we are open to INR 100 million-INR 100 million acquisitions as well? I want to understand the reinvestment strategy exactly.
Look, as long as anything is around our four key verticals that we are operating in, it could be an early stage or it could be later stage. As long as it makes sense and the asset is good. Again, I'm saying that the idea of raising money was not to look at some distressed asset and do some kind of financial arbitrage and gain value out of it. It's all about how do we can build strong businesses. Each of these categories that we operate in, we think that in the long run, they are all large multi-billion kind of categories. We want to gain leadership in that. If something is going to help us to gain leadership in these four verticals, we are open to look at it.
As earlier Hitesh also indicated, we are not close to the fifth vertical idea, but that's right now not on the table.
Sir, just last one question. Sorry. What is our expected IRR on the INR 3,000 crore of cash that we already hold and probably INR 4,000 crore next year if we don't invest? What is the IRR we investors should expect from that? What's your expected IRR on the reinvestments that you have right now, the cash that we are sitting on?
It depends what we do with it. If we actually deploy it to buy assets or to invest in companies or to invest by internal business, that will be 1 IRR. Quite honestly, that's a hard spreadsheet to pull off because it will be fiction. You can write any number, it'll be fiction. However, if you don't utilize it'll be fixed on IRR, which is whatever post-tax 3.5%, I don't know what it is.
Got it, sir. Thank you so much. I wish you all the luck.
That was the last after gap of many questions. We may wait for a minute or so in case you have any questions, else we'll wrap it up. Yeah. We have one question. Okay. Next question is from Mohit. Mohit, go ahead and ask your question.
Yeah. I just wanted to check, do you have anything in the healthcare vertical?
Look, we have invested in one company called MedCords, from the balance sheet, which is into rural healthcare. We keep looking at healthcare. Healthcare, it's a hard business model. Most business models in healthcare, we're still trying to figure out how they make money, how will it be financially viable. When we see something good, we'll do it. It's not as if we are close to it, but we haven't made a big foray into healthcare just yet.
Thank you.
We don't have any more questions as of now.
I'd like to add one more thing. We have also made an investment from the AIF in a company called TrueMeds. It's a pharmaceutical distribution company.
With this last question, on behalf of Info Edge, we conclude this conference. Thank you everyone for joining in. You may now disconnect your lines.
Thank you so much. Bye-bye.
Thank you everyone, and have a good evening.