Info Edge (India) Limited (NSE:NAUKRI)
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Q1 20/21
Sep 8, 2020
Good evening. My name is Arang Bansal. My colleague, Vivek Agrawal, will help me conduct this conference. Over to you, Vivek.
Good evening, and welcome to InfoEdge India Limited Q1 Results Conference Call.
I think the problem with Vivek's line, Satish, you want to start your opening remarks?
Okay. I'll take the participants who's listening. As a reminder, all participants' lines will be in listen mode only, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. Joining us today from the management side, we have Mr.
Sanjeev Bikchandani, Founder and Vice Chairman Mr. Hitesh Obrai, Co Promoter and Managing Director and Mr. Chintan Takkar, Chief Financial Officer. Before we begin today, I would like to remind you that some of the statements made in today's conference call may be forward looking in nature and may involve risks and uncertainties. Kindly reference Slide number two of the investor presentation for detailed disclaimer.
Now, I would like to hand over the conference to Mr. Ritesh Obrai for his opening remarks. Thank you. And over to you, Ritesh.
Thank you, Anand, and very good evening, warm sort of evening, and welcome to our first quarter conference call for FY 'twenty one. At the very outset, we are very, very grateful to all our existing and new investors for the faith reposed by them and us. Thank you for helping us close successful QIP in the middle of the COVID crisis. The shareholder resolution to raise funds was approved on 07/27/2020, and the QIP was launched on the 08/04/2020. We got a demand of six times our planned fund raise from both existing and many new marquee investors.
In the end, we raised INR $18.75 crores at INR 3,090 per share, a discount of 2.74% to the SEBI floor price. The funds raised through the process, INR $18.75 crores, along with our existing cash balance of over INR 1,500 crores, will be utilized to leverage both organic and inorganic opportunities that may arise in our four core verticals going forward. Moving on to our stand alone financial results for the quarter. Billings in Q1 were INR 188.6 crores, down 43.9% year on year. Revenue in Q1 was INR 280.1 crore, down 10.4% year on year.
Operating expenses, excluding depreciation for the quarter, were INR 175.6 crores, down 17.1% year on year. And operating EBITDA stood at INR 104.6 crores versus INR101 crores last year, an increase of 3.5% year on year. Operating EBITDA margins for the quarter stood at 37.3% compared to 32.3% last year. And EBITDA adjusted for ESOP noncash charges stood at INR110.8 crores versus INR106.2 crores in Q1 of last financial year. EBITDA margin adjusted for ESOPs for the quarter stood at 39.6% versus 33.9% in Q1 of FY 'twenty.
And cash EBITDA for the quarter stood at INR 13.72 crores. Therefore, sales revenue stood at INR 371 point crores as of 06/30/2020 versus INR495.3 crores as of June 3039, a decline of 25% year on year. And the cash balance in IEIL and its 100 percent subsidiaries stands at Rs. $15.30 crores as of 06/30/2020. This was Rs.
$15.53 crores as on June 3039. Moving on to the consolidated financial results for the quarter. At the consolidated level, the net sales of the company stood at INR $2.85 crores in Q1 'twenty one versus INR 319.7 crores for 2020. For the consolidated entity, at the total comprehensive income level, there is a profit of INR 94.4 crores versus a loss of INR 192.1 crores for the previous quarter ending June 3039. And adjusted for the exceptional items, Patch stood at a profit of INR 87.6 crores in Q1 'twenty one versus a loss of INR 187.9 crores in the quarter ending June 3039.
The aggregate top line of the investing companies into FY 'twenty declined to INR $5.71 crores versus INR 866.2 crores last year, a decrease of 34%. Now, let's move on to the results by segment. First, we'll just cover the recruitment segment. In Q1 in twenty twenty one, recruitment segment billings were Rs. 140.3 crores, down 44.3% year on year, while revenues were Rs.
200.2 crores, a decline of 8.8% year on year. Operating EBITDA stood at INR120.7 crores, up 5% from June 2019. Margins were at 63.3 versus INR 52.4%, stood at INR 120.6 crores at INR 61.7% versus INR 53.5% in 2020. And cash EBITDA for the recruitment quarter for the recruitment business during the quarter stood at INR 60.8 crores. We saw some recovery in June across various segments suggesting a revival in business as the economy was unlocked.
Y o Y growth improved to minus 38% in June from minus 54% in April. So, there are signs that things will get better going forward. The IT and telecom sort of services segment, major contributor of billing improved from minus 45% decline in April to a minus 27
decline in June. Travel and hospitality, automotive, manufacturing, industrial services continue to
be the most impacted. The Retail segment also is showing signs of recovery in showed some signs of recovery in June after a large decline in April and May. The lockdown impacted seeker both job seeker and recruiter activity on the platform in the months of April and May. And we added an average of 8,400 CVs per day only in 2021, down by 50% compared to 2020. We also curtailed our marketing spend substantially in this period.
Average CV modifications were at $324,000 per day in Q1, a decline of 20% year on year. Our traffic share in the job portal space was not impacted and continue to be in the 90s. We are of course now seeing a significant improvement of traffic on the platform in Q2 as the economy has opened up. Job seeker traffic is back to pre COVID levels year on year, and recruiter traffic has also improved significantly from a decline of 65% in May. It is now down 35 year on year.
And of course, and this is despite almost zero expenditure on marketing. We continue our focus on product investments, specifically in the recruitment management system as automation and technology will play a critical role in the emerging work from home scenario, remote collaboration and higher productivity expectations post COVID. Imjobs.com reported a building of INR 3.16 crores in Q1, down 44.1% from 2020. I'm Jobs revenue for the quarter stood at INR 4.94 crores, up 4.67% from 2019. Moving on to the real estate business, 99 acres.
In 99 acres, billings in Q1 declined by 71% year on year to INR 14 crores, while revenue fell by 24.7% to INR 42.5 crores. EBITDA
for
the quarter stood at INR 4.1 crores against a net profit an EBITDA profit of INR 24 lakhs in 2020. EBITDA adjusted for ESOP stood at plus INR 5.5 crores versus a profit of INR 0.9 crores last year in the same quarter. Cash loss for $19.90 crores during the quarter stood at INR 24.5 crores against a 8.99 crores cash loss last year. In the 1990 Acres business, all business verticals of new home, resale, rental and commercial were impacted in Q1 due to the extended lockdown during the quarter. Post the slump in April and May, where lockdown was very, very severe.
Business started improving gradually in June. Number of clients billed average billing were both impacted in Q1. On average, smaller cities showed lesser decline in billings compared to the larger metros. We reduced our expenses in Nigerian rikers by 32% year on year in Q1. Both marketing and other expenditure were cut.
By the end of Q1, daily listings posted by owners had fully recovered to almost pre COVID levels, which is Feb twenty levels, while broker listings are recovering but at a slower rate, with brokers being more cautious in spending money due to lockdown restrictions still existing in some shape and form in their cities. Whilst traffic was severely hit in April, traffic on the site recovered to 85% of pre COVID levels by the June. Our traffic brand share versus our nearest competitor Magicrix inched up slightly to 57% in Q1 compared to 55% in Q4 as per Google search trends. We continue to see a strong revival of traffic and inquiries through the platform in July and August. By the August, buyer traffic visitors were up 11% compared to pre COVID and 3% year on year.
By the August, buyer inquiries were up 34% compared to pre COVID levels and sixty five percent year on year. We expect this improvement to sustain in the near In fact, to some extent, we've surprised by the rise in yield, by the rapid sort of return of real estate as sort of search activity on our platform in the last two or three months. More clients are also looking to come back to advertise on the platform, and we expect business to keep improving with every passing month. The share of online medium in the overall spend of advertisers is likely to go up due to its inherent cost efficiency versus print and holdings. We continue to invest aggressively on improving our platform experience in this downturn in all our business verticals to come out stronger post the crisis.
In Givansathi, billings grew 13.3% year on year in Q1 to INR22.8 crores and revenues grew 13.2% year on year to INR22.5 crores. Operating EBITDA losses stood at INR13.3 crores in '1, up from loss of INR 8.8 crores last year. EBITDA readjusted for ESOP stood at a loss of INR 12.9 crores in Q1 versus a loss of INR 8.7 crore last year. Cash loss for JeevanSati during the quarter stood at INR 13.3 crores. In Q1, JeevanSati saw further acceleration in profile growth rates and higher traffic on the platform.
Again, because of the lockdown, people are stuck at home and they've maybe got more time to serve Sivansatti. Sales growth slowed down in the first few weeks, but has consistently improved since then. Some of our sort of industry first features like video calling, video profiles and video based online meetups launched in the last financial year helped the business drive growth and end user engagement in the quarter. Aggressive marketing spends during the quarter along with continued improvement in realizations helped maintain relatively higher sales growth. We continue to consolidate our position as we penetrate deeper into our core markets.
We plan to spend considerably more on marketing going forward across all our markets to strengthen our brand presence in the matrimony space. Moving to the Shiksha or the education vertical. In Q1, in Shiksha, billings declined by 28.4% year on year to INR 11.5 crores, while revenue declined by 11.8% year on year to INR 14.9 crores. This was mostly on account of the education sort of admission season getting deferred at most colleges and universities. We made an EBITDA of INR2.1 crores versus an EBITDA of INR4.3 crores in 2020.
EBITDA readjusted for ESOP for the quarter stood at INR 2.7 crores versus an EBITDA of INR 4.5 crores reported last year, while cash loss for the quarter stood at INR 1.3 crores. We made significant traffic share gains during the quarter. Shiksha continues to gain traffic share despite heightened competition from different layers in this. We continue to invest in making our content more comprehensive and more student friendly and in building deep domain expertise. This will hopefully help us in generating more response for our clients going forward.
Moving on to our strategic investment. Since the easing of lockdown restrictions, we have seen recovery of business in most of companies like Zomato, Ustra, ShopKiranha business among others. For Zomato, along with the bounce back in order volumes, profitability of food delivery business has improved and the monthly cash rate of the company by cash burn of the company has come down significantly. So, Matto now has adequate capital with strong inbound investor interest. PolicyBazaar also continues to grow and is not expected to burn much cash in its operations going forward.
Pesa Bazaar, which saw a major decline in its business, also seen a business bounce back in the last couple of months. We've made three new investments through our semi registered category two AIF InfoEdge venture fund, which we had announced last quarter. Our investee company, Happily Unmarried, which owns the brand Ustra, closed a new round of funding of INR50 crores from a new institutional investor. We also made a follow on investment in our investee company business, which raised primary funding of INR5064 crores co led by two new institutional investors. And we continue to evaluate new investment opportunities.
That's it. Thank you. This is all from me right now, and we are, of course, happy to take questions.
Thank you, Itesh. We'll now begin the question and answer 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. Ladies and gentlemen, we'll wait for the moment while the question queue assembles.
Yes. So the first question is from Vivekananda Subramaniam from Ambit. Vivekananda, please go ahead and ask your question.
Thank you for the opportunity. I have three questions. One is the billing recovery that we saw in the July compared to the first quarter sharp Is there any further recovery in the months of July July, August? And what are the billing trends in the key cities and sectors? That's question one.
Second question is, Hitesh, while you are mentioning about the buyer traffic on 99 acres, you mentioned about the end August trends. It was very unclear. Your line was problematic. So we did not get what you were trying to say about the buyer traffic. If you could just highlight those numbers again and build on them in terms of why the sector or why 199Equals is seeing so much more buyer traffic now?
And will that translate into a better monetization for you? The last question is on any thoughts on the new normal as far as our operating costs are concerned? And is there any link between revenue and employee incentives? Just trying to understand what part of the cost control that we demonstrated in the first quarter is sustainable. Thank you.
Okay. So first question was around billing in July and August. So of course, July and August are doing much better than April, May and June. Like I've said, buyer traffic in sorry, job seeker traffic in Auchari is back to where it was last year. In fact, on some metrics, are growing at 20% over last year as well.
Recruiter activity is back to 65% levels. You know, now, of course, let's see what happens to billing because a lot of our billing actually for the quarter will happen in September because that's when a lot of sort of subscriptions are due for renewal. But clearly, July and August start tracking much better than And this is when you're not spending much on marketing. And the same we are seeing the same in the real estate business. Our billings were down 71% last quarter, but both July and August were pretty decent.
We're still not back to base. It's still not back to the numbers we were doing last year, but, it's getting better and better with every passing sort of week. Let's again, let's see what happens in the month of September. Now buyer activity on 99 acres is actually back with a bang. While the number of people visiting the platform are up are also up over last year, what we have seen is a massive surge in response from where we were last year.
So on the resale side, for example, buy inquiries are up 65% year on year. Right? That's a massive jump in queries on the resale side. On the new home side, also, are up. On the rental side, we are still down compared to last year, in terms of the number of inquiries on the platform, but rentals are a very small part of our overall business.
Now let's see if this also sustains going forward. Right now, revenues will follow also because of a lot of seller activity in the platform. So a lot of owners are coming in and sticking their properties directly as well, more than what was the case last year.
Hitesh, your voice is breaking. You want to shut off
your video? So dealers, am I more audible now?
Yes, this is better. Thanks.
So dealers and developers have been slower to get back onto the platform because they were not sure on whether people sort of moving out of their houses and taking people for site visits. But now with buyers coming back and with listings coming back onto the platform, we are seeing dealers and developers also come back to the platform. Numbers of number of active dealers and developers and projects on the platform is also improving week on week. We are still not back to the levels we saw we were at last year, but it's getting better and better with every passing week. Since we make most of our revenue from dealers and developers, revenue will sort of lag traffic by few weeks.
Right? Your third question was on what? Sorry.
That was on the new normal as far as operating costs. And I'm just trying to understand the cost control that we saw in the current quarter, what part of that is sustainable?
So it a lot will depend on what happens to the market going forward. You know, if the market comes back quickly, then, of see, what what what we basically the cost control in q one was on account of the fact that we did not give a salary increase in q one. We sort of put that on hold, number one. Number two, we also put Fresh hiring on hold. And number three, we cut marketing sort of expenditures, especially in Nokri and Nigeria and Nicaragans.
And number four, since we are not we are working from home and not out of office, we saved fair amount of money on admin costs. Now going forward, you know, if we see business bouncing back and if competition also bounces back, then, you know, our marketing expenditure will go up. Certainly, it will go up in Jeevan Sathi because that's our plan. We are planning to spend a lot more in Jeevan Sathi going forward. That's a business which is growing for us, and the growth rate in Jeevan Sathi has been improving month on month for the last few months.
In Nokri and Naijanai Acres, you know, we'll start start probably start spending on marketing once we see the market sort of come back. Our admin expenses will remain low for a while till we start going back till we till we you know, it is but if you go back to working from office, then that is gonna be a function of, you know, the COVID situation. You know, those costs will remain under control for some time. But, yes, we'll have to spend we are spending a lot more on IT costs, IT infra, because we have to sort of we we need to buy more software, we need to buy more licenses to enable our people to work from home better better. So, on hiring, we have seen demand for digital talent go up in the market.
So, we may be to sort of force to relook at revisit our decision on putting salary increase on hold, at least for the IT talent in the company going forward. We may also and as far as sales incentives go, they are not incentives we pay out are not linked to absolute sales. They are linked to the target we set for salespeople in the company. Targets, we believe, should be stretched, but they should be achievable. So it is possible that even on lower targets, salespeople will end up making incentives going forward because you would like to keep, you know, them to remain motivated, you know, and sort of do their best.
So, to some extent, you know, our costs will be a function of how fast business recovers. If business recovers quickly, our costs will go up once again. On the other hand, if we are pretty slow, then at least advertising costs, you know, for 99 acres and no fee. And
Thanks for this, Hitesh. Just one small follow-up. So within recruitment, what are the segment and city wise trends that you're observing? Is IT recovering faster than others? Is Bangalore doing better?
And any trends that you want to call out?
Yeah. See, clearly, certain sectors have been impacted more than others. So sectors like auto, retailing, travel, tourism, hospitality, construction, real estate were impacted the most in Q1. We saw traffic sort of listings and recruiter equity decline by 70%, 80%, 90% in some of these sectors. Sectors like IT, you know, pharmaceuticals, you know, consumer goods, you know, education were impacted a lot.
There, you know, we saw a decline in activity of around 35%, 40% in Q1. The IT sector has also been has also bounced back. I'll remember the exact details. Activity of from IT companies was down only 27%. So it's very likely that some of these sectors get impacted the least in the months of April and June and also bounce back the fastest.
Travel, totality, apparel, retailing, they will still take some time to sort of I mean, it'll be a while before these sectors bounce back.
Got it. Thank you and all the best.
So the next question is from Parag Gupta. He is from Morgan Stanley. Parag, go ahead and ask your question.
Hi, thanks and congratulations Sanjeev and Hitesh for a successful QIP. So I have two questions. Now that you have close to $450,000,000 of cash on the balance sheet, while you did mention last time that you would like to keep back some for operational expenses and just keeping it for a rainy day. But with the extra cash that you have, have you thought of any potential opportunities in the marketplace that you could be going after? So just wanted to get some evolving thoughts from you at this point in time as to which segment and what is it that you're likely to do with that cash?
And the second question is just on competition. Have you seen any significant shakeup in the segments that you operate in? Let's say, more from a core business perspective, anything in 1990E real estate or anything in matrimony, which could potentially create M and A opportunities? And relatedly, is there anything that could happen for some of your investee companies? So just your thoughts on that will be great.
Okay.
I think firstly, you should congratulate Chintan also because he is the one who spearheaded the QIP entire QIP process. So we were sort of, of course, put in up in front of investors, but he was the guy running the show. So so that's one. And, see, as far as uses of funds go, see, what we said while raising money also was that, you know, we would like to push the pedal on, you know, some of the internal businesses we have in the company. The jobs, of course, we continue to do well, and we are investing in a bunch of adjacent areas around Nokri.
So we are we are experimenting with a blue collar job board. Are trying out an AI based hiring platform. We are doing a bunch of other things. We have the RMS business. We are push we wanna push a little more aggressively.
But in both actually, can create a It's maybe maybe the time has come for us sort of double investments. You know, the truth of the matter is that the real estate vertical is a very large vertical. We are a leader, but we are not a dominant player in this vertical. We are not as dominant as we are in jobs. In matrimony, we are a strong number two player in the North and West.
We are number three nationally. So, again, there's we see a huge opportunity there to gain share if you push the pedal on marketing and acquisition. So one, you know, this money will be used to aggressively invest in all the internal businesses. And, you know, we will sort of do this both organically. And if there are inorganic opportunities, we would like to pursue them as well.
Now the number of inorganic opportunities out there, which are of interest to us, maybe you can count on the fingers of two hands. They are not that many number. Are we in active conversation with anybody at this point in time? The answer is no. But if an attractive opportunity comes our way, we will be more than happy to grab it in in the some of the verticals in which we already operate.
So so that's really what so so we didn't want to sort of raise and scramble for funds at that point in time, and that's why we did the QIP in in August. We expect something to emerge in one of these areas at least over the next twelve to eighteen months, some opportunity. Now is there you know, is the probability a 100%? No. But maybe there's a 60% chance that something might happen in the next twelve to eighteen months.
Let's see. So that's really the the plan on the yeah. Did I answer your question? You know, is there anything else that you would like
I think that answers the question on the funds. And just if you could give us a sense of competitive intensity, has that is there a significant shakeup? Or have some of your key competitors just paused and will likely come back when things start recovering?
See, for the last few months, everything's been very quiet. And I think people have started just waiting and watching to see how it evolves, how the situation evolves. Impacted majorly by what happened in April and May. People were taken by surprise, totally by surprise. The lockdown was very stringent.
And like I said, you know, our business was impacted. Recruiters impacted 44%. 'nineteen was down 71%. That's how stringent the lockdown was. Things are now beginning to return to normal.
So I think the actions will start in a month or two if the situation continues to get better. So has there been any major change in the last few months that we noticed? No. But yes, in any slowdown, what you've seen in the past is that the number three and the number four players get impacted the most. The number one player is always impacted the least.
If come
Tish, we can't hear you. You don't want to switch off a video?
Companies have to choose one. Normally happens in a slowdown is their layer, and the number three, number four players sort of always sort of end up on the weaker side. So let's see how this plays out. A lot will depend on how fast the market recovers going forward.
Got it. This is great. Thank you very much.
The next question is from Manju Bhashani from Sundaram Mutual. Please go ahead and ask your question.
You're on mute, Manlu.
Sure. But just I want to understand, you did mention about the utilization of funds and how there may be some certain opportunities that may come your way therein. So I'm only trying to understand, given the current situation and where things are for competition as well as for us, What would you look at in these names which which may become your targets in the near term? Is it going to be the geographical presence, the scale, or the niche, or what are the things that you would look at in these potential targets therein that might be of interest to you?
See, our ideal our ideal sort of candidate for acquisition would be somebody would be some a company in a space in which we already operate, a space which you already understand. Ideally, a candidate for acquisition should help us get to clear leadership in the markets we operate in because that's what ultimately drives pricing power and margins in our business. Ideally, it should be a sort of reasonably large company. I mean, we will keep doing small acquisitions as well, but our ideal candidate would be somebody which is at least a reasonable top line company. So, these are some of the things we would sort of look at.
But, like I said, the number of targets out there, you can count on the fingers or maybe two hands at max. So, there aren't that many sort of companies in the spaces we operate, which sort of meet all these criteria. And so, let's see if we can make it happen.
Sure.
Thank you.
Yes. The next question is from Mukul Ghat from Hayden Security. Mukul, go ahead and ask your question.
Yes. Hi. Thanks for taking my question.
Mukhul, can you come close to the mic? I can't hear you.
Yes. Sanjay, is this better?
Much better. Thanks.
Great. Hitesh, just wanted to follow-up on the question about acquisition and QIP. If I look at your commentary, twelve to eighteen months seems a fairly long period. Have you seen any opportunity go away or reduce over the last one to two months, given that you moved quite rapidly on the QIP? Is the ask rate still too high for you to be comfortable acquiring or making an offer to someone?
See, nothing which is of any value in the Internet sort of space is very cheap, Right? So all acquisitions will come at a certain price. And of course, for the good assets, will have to pay a good price. But like I said, if these acquisitions help us, nothing's sort of gone away. Everything is no other no company we are sort of looking at has been acquired by anybody or has sort of done a deal with anybody else.
So, any acquisition we do should help us gain more share, improve our pricing power, or help us maybe get into sort of adjacent new markets, increase the addressable sort of opportunity for us, market opportunity for us in the medium term. Or maybe it should be a new business model, something we are mostly in advertising sort of listings and subscriptions kind of company. We've experimented with transaction once, but that was a long time bank. So we could also look at transaction plates in the spaces we operate or in adjacent areas. So why it could take twelve to eighteen months is because we would want to do the right deal and we would want to pay the right price and we would want to buy the right company.
And sometimes these things take time. We would not want to rush into an acquisition just because we've raised money.
Understood. And the second question was on the margin performance, good this quarter. And I think you very clearly explained the impact on various moving parts. But in the scenario, which you also alluded to, if things get back to normal soon, the revenues conversion of billing will obviously take some time. So will that have a meaningful impact on your margins?
Or will you kind of keep your cost under control till revenue growth comes back? And second part of this question is, at what margin levels are you guys comfortable? Because I think, clearly, you are running at close to all time high on NOCRI.
See, clearly, these margins are not going to sustain because, see, the revenue or the margins are a function of revenue and cost. And yes, our cost declined this quarter, but our billings declined by 44%, and that was not reflected completely in revenue. And that's going to get reflected in our revenue going forward, right? So a 44% decline in Q1 will result in much lower revenue growth in Q2, unless billings in Q2 go up substantially. So let's see how this plays out.
Certainly, from our standpoint, we are not very to margins or anything of that. So we want to run if there's a good opportunity which comes our way, we would like to grab it. So if we see the market recovering and we see an opportunity to sort of push the pedal and gain share, then we're not going to think about how margin will be impacted in that quarter or whether cost control and stuff like that. Right? So so we so we would like to play by the year.
We would like to see what's happening in the market and react appropriately. Like I said, we are already seeing a a sign some signs of a bounce back in 99 acres. So if that continues, then we may start investing more in 99 acres without waiting for the market to return to normal everywhere. In G1 Sathi, we did not see any revenue decline at all. In Q1, our revenue grew by our billings in fact grew by 13%.
In the month of July and August, billings have grown even faster. So, we are sensing an opportunity there. We want to double down. In Jeevan Sathi, we were going to up our marketing investments in Jeevan Sathi this quarter itself. So we are going be more led by what's happening in the market, what's happening in competition, what opportunities we are seeing.
We don't want to sort of, in the short term, manage margins, manage costs and give up on the long term opportunity.
Great. The last one was on Zomato. A couple of quick ones there. A, what is the current burn rate with Zomato has in the most recent month? On the fundraise side, is the fundraise over now?
What was the total amount which they raised eventually?
We have not made an announcement of any fundraise on the model. We will make those announcements in due course of time as and when the fundraise happens should the fundraise happen.
Okay. So the inbound investor interest, which Hitesh mentioned, is basically something which is on the horizon, but it has not at least So
Zamato has got enough money, but it probably will raise more money, and there's enough investor interest.
Fair enough. And Sanjeev, on the cash burn side and return to the pre COVID level delivery volumes, if you can give some comments on what are the
So it hasn't yet returned to pre COVID level delivery volumes. See, basically, roughly about when I last checked a few days back, their estimate was maybe 65% to 70% of restaurants that were shut down have opened. And delivery revenue is back to about maybe a similar level as pre COVID, okay? Now that does not mean volume is back. It means necessarily, it means that it's possible that they are charging higher delivery fees, charging a higher take rate, giving less discounts and so on and so forth.
But overall, it's a much healthier business. I think for the restaurant sector as a whole to recover to where it was earlier, I mean, estimate is maybe twenty, twenty five restaurants never opened. And then new ones will come and take their place. But that might take a year or so because see, most restaurants can't survive purely on delivery because they need dining in revenue, okay? Now if you're paying rentals, which are not on a cloud kitchen, which are not in the back lanes, you're paying high street rentals, you definitely need dine So until dine in happens, restaurant industry will not really be healthy.
Delivery will really take a restaurant just so far. It takes Zabato very far, but the restaurant industry as such, it will take them only so far because people are stuck in locations that are already there. Until dine in happens, they can't make money on location purely on delivery.
Fair enough. Thanks for answering my questions.
Yes. Next question is from Roni Kapoor. He is an industrial investor. Roni, go ahead and ask your question.
I want to know that the basic operation of the companies of technologies, but your all investments are correlated like the private equity firm.
Sorry, I didn't understand your question.
My question is that the main operation of the company is related to the technology, but all the investments are related like a private equity firm?
Well, actually, the investments in external startups are in largely tech enabled tech companies, right? So whether you look at any of our investments, there will be a tech angle to it. Now we invest behind our internal businesses. We invest behind startups in the adjacency to our internal businesses. We try and acquire companies in the verticals which we operate, and we also invest in startups that are not in these four verticals, right?
So Zomato is not in one of the four verticals that we operate. Polysigla is not one of the four verticals that we operate, neither is ShopKirana nor is Gramophone nor is Ustra nor is ShoeConnect, which is now called Business. But they all have a tech angle to it or a consumer angle to it or a B2B SaaS angle to it, Shipsy, for example, right? So I would say we are tech investors. We are a tech company, and we invest in our own businesses.
We invest in startups, which are in the milieu of our own businesses. We try and acquire companies in the verticals that we operate. And we also invest in startups and not in the four verticals that we operate. But all of them are tech. Thank you for your answer.
The next question is from Sunil Shah from Total Staff. Sunil, go ahead and ask your question.
Yes. My
questions have been answered on the cash and the acquisition. Thank you very much. Thanks.
Okay. The next question is from Ghosam Behri. Ghosam, go ahead and ask your question.
I'm sorry. I think I raised my hand by mistake.
The next question is from Vatsal Modi. Go ahead and ask your question.
Am I audible?
Can you come a little closer to the mic, please?
Yes. Is this better?
Much better. Thank you.
So, Ritesh, I wanted to understand a little bit more about the impact of this rise in digital adoption that we are seeing across the ecosystem.
So
would it be fair to say that a large part of the
Everybody
else go on mute, please? Rajiv, can you go on mute?
I think another participant, Sunil, is unmuted. But, anyway, I'll continue. See if you can.
Please carry on this better now, actually. I think we've lost Anand, I think we lost you. Anand, you're on mute.
Yes. So we'll go to the next question as of now. So the next question is from Uzkash Sulaghpurwala. He is from Damas Capital. Uttarsh, go ahead and ask your question.
Uttarsh, you are there?
Yes. Yes, sir.
Please go ahead and ask your question.
So I have two questions. First on policy, Baja, what has been the growth rate of the company in last one year? And is it company profitable? And second is on Zomato. If 30% of restaurant restaurant closes down, then will the Zomato be able to recover its pre COVID volume in next one year?
Or will it take longer? And what is the expected growth that you are looking in Zomato for next one, two years?
Okay. So neither of these companies give out specific numbers of like growth, so we can't disclose that. But look, Zomato is coming back nicely, the delivery volumes the delivery value rather and also the volume. We expect in a few months' time, they'll be back to pre COVID level, but we have to wait and watch. If there's a second wave, it's another thing.
If there's a further lockdown is another thing, but we are still waiting and watching. In PolicyBazaar, the some other business were badly hit, largely because employees couldn't go out and do KYC of prospective customers. The insurance part of the business, which is policy was out, grew nicely, right? We expect this growth to continue, but we have to wait and watch.
Okay. Thank you.
Yes. The next question is from Nikhil Pawa. Nikhil, go ahead and ask your question. Nikol, you are there?
Nikol, you're on mute.
Hi. Yeah. Sorry. Hi, Sanjeev. Hi, Atish.
Hi.
I just wanted to get a sense of you know, there are a couple of regulatory headwinds coming up, particularly in case of the personal data protection bill as well as this report on nonpersonal data, which could lead to other companies potentially accessing aggregate data or anonymized data. Since most of your businesses rely heavily on the data that you have, I was wondering about what kind of what are your views on these situations? What and what are your expectations of what's going to happen?
So some of these sort of reports have been brought to unnoticed, but we haven't really happened to go through them in detail. You're absolutely right that some of these things really concern us. Obviously, from our standpoint, we are a data company. We take all possible precautions to protect and guard our data. We make it available only to recruiters for recruitment purposes in the case of NOCRI and so on.
But yes, any if the law changes, it could impact us positively or negatively. We are yet to deep dive and understand what the implications of the proposed sort of bill are.
Yes. So Nikhil, see, our view is that an individual's data belongs to the individual. If he has come and entered his resume in a database, he'll enter it for a particular purpose under certain terms and conditions and will only use it for that. So even if we are allowed to use it for something else, by law, the truth is we will honor our commitment to our users and use the data only for what we have committed we'll use it for. We will not violate that commitment to our users.
Having said that, obviously, we have to follow law of the land, and we and that is still emerging, and we are going to figure out how to deal with that.
Sanjeev, particularly in case of the nonpersonal data, what the committee's recommendation is that other businesses and the government should be able to access anonymized data sets and also aggregate information that you may have from your databases.
So there are two things.
And that can be given you would have to give that mandatorily if demanded.
No, no. Mandatory, run with the government. I don't believe a private company can mandatory demand our data, even anonymized manner, okay? I cannot, for example, go and demand, LinkedIn's data in an anonymized manner. I'm a private company, right?
So if the government Actually,
that is a part of the report. Private companies can also demand data from other private companies.
I don't that well, we'll to look at that. I think that is quite unusual, which will give us an opportunity also to run other people's data, if that is the case.
Okay. Okay. Thank you.
So I will let Vatsal take up his question because I think he was there in the queue before. Vatsal, you can you can ask your question.
Yeah. Hi. Thanks, guys. Sorry. So, Hitesh, what I was trying to understand is, is it fair to say that the rise in digital adoption will benefit the blue collar segment a lot more?
But in the white collar segment, a large part of the candidates are already online. So there's no incremental benefit as such that you might get in the white collar space. Is that fair to say, or do you think the SMEs getting online could help the white collar side as well?
No. There'll be there'll be some benefit. You know, you're absolutely right that many of the white collar sort of workers are already online. But even then, you know, what will happen with time is that bandwidth will improve, speed will get better, you know, Internet will get faster. All that will happen.
So that will benefit us in some way. But, yes, from a new user sort of standpoint, it won't have many incremental benefit. But what can also hap what will also happen as as a result of this is that our platforms will hopefully become richer over time. So like, you know, I mentioned earlier, we've already introduced video profiles on Jeevan Sathi. We are experimenting with video profiles in in IIM jobs.
We are experiment going to experiment with video profiles in Nocree very soon. Video interviewing will be enabled over time. Video calling has been enabled in June, Carti. So there'll be some benefits because the platforms will become richer in terms of content, in terms of, you know, experience over time because, you know, people will have access to cheaper bandwidth.
Got it. No. That's useful. And how about 99 acres, Jeevan, Sathi, are you expecting a lot more users to also sort of get on these platforms or, again, similar in terms of benefits there?
No. We expect more users as well. For example, Jeevan Sathi has been growing very handsomely in the tier three and tier four cities of this country for the last couple of years. So the many of these sort of city users in these cities were not online till sometime back. And, again, you know, it's a very rich side, lots of photos, lots of pictures, we're introducing video as well, calling as well.
So so penetration increased penetration is certainly helping the Jeevan Sathi business. Like you mentioned, it'll help the blue collar board job boards as well over time. On the real estate side also, you know, real estate is bought bought and sold in every, you corner of this country. So, you know, it'll real estate sites also, especially on the rental side because rentals, you know, are often sort of user base or people who sort of take houses and rent. Not everybody pays $2,030,000 rupees a month month of rent.
There are enough people who pay 2,000 rupees, 3,000 rupees, 1,000 rupees, 4,000 rupees for rental as well. So it'll help us get those users, those landlords on the platform as well over time. So it's certainly, all these things will help with more penetration in tier two, tier three, tier four cities. And we'll sort of also over time results in the platform becoming much more richer in terms of content.
Got it. Perfect. Thank you so much.
Next question is from Aditya Bhura. Please go ahead and ask your question, Aditya.
Am I audible?
Yes. Please go ahead.
Hitesh, Sanjeev, and Shankaran, and congratulations on a successful QIP and a good set of Q1 numbers to you and the team. I have two questions. The first one being with the increased consumption of video content during the lockdown and after coronavirus hit, what is the impact that we are seeing on a business such as QK? Are there is there any commentary that you have that might be meaningful in that respect? And the second question is on the competitive intensity that is being seen in the food delivery space, where a quarter ago, Amazon had piloted its service in Bangalore.
Some color on that, if available.
Thank you. I'll ask the second question first. As of now, there does not seem to a major push by Amazon to either scale up, that service. But obviously, it's something which Zamato is watching. And we'll figure out how to deal with the situation where Amazon gets scheduled up and puts a lot of investment behind that initiative.
As far as QK is concerned, look, QK had a bit of a quite a setback actually because the founder and CEO passed away a couple of months back in a road accident. And so the management team is still stabilizing the situation post that. The company is doing all right. Burn is coming down a bit. But for it to make major initiatives and move forward will take a little time.
Sure. Got it. Thank you.
The next question is from Vinayak Mota. He is from Augmenta Research. Go ahead and ask your question, Nayak.
Yes, sir. So I basically had two questions. So first one was if you could give a number on what is the cash burn for Zomato on a monthly basis? And the second question would be, like, can you please highlight, like, you a while back, you had you know, you were not doing some major opportunities, and you were having cash on your hands. So have you started investing that cash into some PE investments?
Or how is it that like, what is your strategy out here? So I'll have these two questions.
So Zamato does not disclose the specific burn numbers month on month, but it is substantially down. Having said that, the burn may go up a bit in the coming months because they are reinstating the salaries they cut, and they may start investing in brand. But I think unit economics will continue to be prudent and sensible, right? These are overheads that we're talking about. As far as the cash on hand is concerned, our first of all, we don't do PE investments.
We do early stage investments, and we double down. So I wouldn't call our investments PE investments. I would say seed, Series A, maybe a little bit after that. We continue to look for investments, but we divide our investments in two or three buckets. One is investments in start ups that are operating in the same verticals as we operate, which is jobs, real estate, matrimony and education classifieds.
Here, we could do a minority investment. We could do a majority investment. We do an acquisition, right? The second is investment further investments behind those companies that where we've already invested earlier from the Infowit balance sheet or an Infowit subsidiary balance sheet. These would be Zimmerturm, a policy bazaar, it could be Gramophone, it could be ShopKiranai, it could be Ustra, it could be ShoeConnect, those kind of companies, that sort of companies.
And then there are fresh investments in companies that we have not invested in earlier, which are not in the spaces where we operate businesses, right? So those will be through the AIF that we floated in January, and some investments have been made through there already. And so that's a new vehicle we floated for further new investments in areas that we don't operate.
Okay. Thank you so much.
The next question is from Vizhid Jain from Citi. Vizhid, go ahead and ask your question.
Hi. Thank you. Can you hear me?
Yes. Please go ahead.
Congratulations first on a great QIP. My question is more to the comment that Hitesh earlier made about pushing pedal to the core businesses. On specifically, Nokri, when I see the revenue mix, right, I see around more than 50% of it is coming from the resume database, and there are two or three other areas through which you collect you monetize that asset. So my question is, in this post COVID scenario where a lot of activity, including business activities moving to digital, do we is your folk do you think this mix will change over time? Where do you think this mix will go in the next three to four years?
Any color on that will be great. And secondly, I missed the part where you talked about the margins that you reported on Nocree in this quarter. So if you could repeat that, that would be great.
So I'll answer your second question first. So NOCRI margins, right? That's what you want to know? Or you want to know info? NOCRI.
NOCRI. So in NOCRI, operating EBITDA stood at INR 124 Recruitment business operating EBITDA stood at INR120.7 crores, up 5% from last year. Margins were at 60.3 versus 52.4% in Q1 of last year. And EBITDA readjusted for ESOP to 123.6 crores, at a 61.7% EBITDA margin versus 53.5% in 2020. Now to answer your first question, you know, the revenue mix, or the product mix, see, unlikely that it will change in a hurry and in the short term because the Restex product continues to be our best selling product.
We, of course, like I said, we have been sort of experimenting with new offerings. We've launched an e hire service. We have recruitment management system, which we introduced in the market. We have a campus hiding product. We are working on we are introducing new branding options on the mobile phone.
We are working on an enterprise variant of ResDex. But I'm Jobs, of course, we started selling in the market. So we've got a bunch of new products out there, but they are all very tiny right now, and they will grow hopefully over the next few years. But for the foreseeable future, I think ResDX will continue to be our star.
Great. And my second question is on Jeevan. Sathi, you mentioned that you're seeing month on month increase in activity, month on month increase in revenue on that platform. So I'm just curious because historically, I've understood matrimonial business as not just the fact that you are number two there in North India, but also that it's overall quite fragmented. So I'm wondering if, you know, over time and this is something Sanjeev alluded to earlier, over time platform enrichment and those kinds of things will make it more difficult for the smaller players to even stay in the business.
And is that something you're seeing now once you've launched these video call and phone call type features? And secondly, are you looking to increase your share in Jeevan Sathi mostly through marketing at this point? Or is there a tech angle there as well?
So the maturity market is not that fragmented, actually. There are three large players, Jeevan Sathi, Shati and Matrimony. And then there are a bunch of small players. But I think the large players, the three large players between them control close to maybe 85%, 90% of the market, if not more, right? So it's fairly concentrated in that sense.
You're absolutely right. See, in the long run, it'd be very hard for the smaller players to match the larger ones on a product, technology, innovation because that's not easy to do for the smaller companies. But they will continue to exist in pockets. So I mean, that's how we are sort of as far as investing more in Jigunsati is concerned, yes, a lot of bulk the bulk of our investments are in marketing right now because the only way to gain share is to get more profiles. There's a very direct connection.
It's a premium model. The more profiles you get, the more matches you're able to make on the platform. The more matches you're able to make on the platform, the more sort of people get married through you, and you get more sort of revenue and you get more sort of registrations. But we're also seeing a lot in technology. Like I said, we just enabled video profiles on the platform.
We've enabled video calling on the platform. We've been organizing online Milan Samadas for different communities on the platform. So all these sort of technology, our mobile app continues to be the best in the business. We continue to innovate on the mobile sort of app front. So all these sort of investments, we will continue to sort of do and maybe do even more going forward.
But marketing is where the bulk of the money will go in the near term at least.
Great. Thank you so much. Those were my questions.
Next question is from Prince Badar from GM Financial. Prince, go ahead and ask your question.
Can you hear me?
Yes, please go ahead.
Yes. So a couple of questions, Hitesh. First of all, I'm sure a lot of sales in this COVID time would have been closed digitally by the sales team. And being a sales team being a large proportion of the overall employee cost, do you think any long term implication we could have on the cost saving front in that? Or would you prefer or would the company prefer having more offline transact or offline interactions with the clients?
That is the first question. And the second is, basically, you did talk about the traffic trends in Noctri and 99 acres. If you can, can you share some trends which you have observed in the past couple of months in terms of billings? Which direction they have been heading? Is there a recovery or some some sort of data on that?
Prince, good to hear from you. See, you know, you're right. See, Zoom is you know, our QIP, we sold to investors on on Zoom. Right? So we didn't have to any part of the world.
In normal circumstances, we would have had to sort of go to The US, Europe, Singapore, Hong Kong. We would have spent hours and flights, you know, days in hotels, all got red eyes. And then, you know, we would have sold the QIP. This QIP was done in one week on Zoom. And in one week,
you met,
you know, and sort of interact with over a 100 investors. Right? Correct. And it was done. Correct.
So, clearly, you know, technology this techno it's a big enabler. And, you know, for the last few months, we've trained our sales teams on how to sell on Zoom because not all clients want to meet. They would rather sort of talk to you on the phone or a Zoom call with you. Not enough of them want to meet face to face. So it's and there are several advantages of this technology.
You know, you can I can be here and talk to a client in Bangalore? Previously, I would to take a flight to go to Bangalore.
So you
know, interact with the clients everywhere. Your sales team can be based anywhere, all that. So there are many advantages of using technology. And, you know, we'll continue to invest in, you know, in in this technology going forward. But, you know, but but I also believe that once this COVID situation is, behind us, and things sort of go back to normal, then enough clients would want to meet face to face as well.
Right? Enough clients would want to sort of there are this can't be done on the phone. There are some things which need to be sort of discussed face to face. Especially the larger customers, I'm sure, would still want to meet us face to face. Now they may not want to do all their meetings face to face, you know, if this technology becomes the new normal, But they may still want to meet some of us, you know, from time to time, face to face.
So let's see how this evolves. We are sort of, you know, getting ready for for any sort of situation. Like I said, we are training our sales team to sort of adapt to these new tools. And, you know, we think in the long term, it'll be a big advantage for us if the world moves to this model. So so that's so that's one.
Your question the second question was on billings. Right?
Yeah. Billings trends, basically, if you can share some some idea which they are because you shared some, some information on traffic, some trends on billing side would be very useful.
So, Chintra, I don't know how much we can talk about billings. What's your Chintra, you're on mute?
I would broadly say that, look, all know that billing
comes with a lag
on traffic. Sure Correct. Yes.
The traffic number. So with some lag, you know,
we are booking that, you know, that
traffic will be monetized. We'll keep improving. So it's hard for us to give any guidance or any forecast because also, you know, city to city, you know, this seems to be changing. I think it depends on that as well. So we have seen as as we unlock and as we kind of as there's the city and the COVID number starts going down, we have seen that there's an increase in traffic, then we can monetize it much better.
But if it again starts increasing, then it might have some kind of uncertainty involved there as well.
Got it. Okay. That's all from my side. And Chetan, good hairstyle, and very good set of numbers.
Congratulations, guys.
Thank you. The
next question is from Padjumna from Pretone Fund. Padjumna, go ahead and ask your question.
Hi, am I audible?
Yes. Please go ahead.
Yes. Hi, guys. My question was regarding the fund, the AIF that you guys have recently launched. Just wanted to understand the structure of that and whether you're raising external capital. There'll be external LPs in that fund as well.
And how will that fund be managed? You know, will it be managed by a separate management entity, or will it be managed by the existing team at InfoEdge? And also, you mentioned that some of the new noncore investments sort of would be made through that fund going forward. And so in terms of that, would you increase the fund size over time or deploy some more of the capital that you have raised currently through that fund?
Yes. Okay. So first of all, the capital raised currently is not meant for external investments. I mean it is our intent is to use it for money growth opportunities, right? Now of course, all money is fungible, but this is our intent, and we intend to do that.
Now having said that, now coming to the AIF. AIF is a cat to AIF under SEBI. Our initial thought was that we would invest, let's say, would earmark, say, INR $2.50 crores a year for three years as the investment period for this fund, which is roughly equal to what we have invested in last year before this fund So it's not as if you had committed more money than we had earlier been investing. When COVID happened, we took a call.
So when we first announced CAF, we got a number of people talking to us, would you be looking at raising external money? And our initial intent was we would not raise external money.
Right.
When COVID happened, we figured that, look, we don't know what's going to happen. Why don't we reduce the demand on InfoEdge liquidity over the next three years to half of what we'd intended. And so we said we'll put in half the money and half we'll raise from outside. Now we are not really interested in running a twenty-fifty LP fund. We want one, maybe two LPs.
So And we're talking to only such people who can put in that kind of money and are interested in doing it. Second, this is structured as a slightly longer fund than most VC funds in India. Most VC funds are eight plus two, nine plus two, seven plus This two is a twelve plus two year fund. And the reason is, if you look at most VC funds in India, the exits are kind of hard. So if you leave out Flipkart, it's not as if strategic sales have given a lot of joy to many investors.
Although very recently, there has been this company has been bought out by Baidu, right, WhiteHat, And that was at a, I would say, a good valuation of the time frame in which caught an exit. But these are two anomalies. By and large, it takes a long time for people to get a good exit. And very often, that exit is the IPO when it happens and for real value to be created. And IPOs typically take ten years or longer in India.
I mean, we took nine years from inception to IPO. We were the fastest. MakeMyTrip took ten years. I think Just Dials took eighteen or twenty years, I forget. Matamet took eighteen, twenty years.
So it takes a long time.
India Mart also took its time.
Yes. India Mart, yes, then it was launched in '96 and it went public, whenever it went public, I think, a year or two back.
Yes.
So therefore, you need patient capital in India, okay? If you look at the way we invest, we first went into policyholder in 02/2008. We invested in the first three rounds. We invested in 2017 and 2019. So as recently in 2019, we are still investors after being there for twelve years.
And the real value has been created that happened in last two, three, four years. Likewise in Zimato. We invested in 2010, we are still there, okay? In both these companies, we took some money off the table, but that was by and large to facilitate other investors coming into the company. So we have patient capital.
Our fund reflects that, and we want one or two other LPs who are equally patient. Because without having patient capital in India, you
really
can't do early stage investing and get great exits because it takes time. India is different from the West in that sense. Sure. However, if you raise money from LPs who do not want to do twelve plus two years, right, who don't have prop money or who don't have the current time horizon, you then perhaps will have to exit prematurely, and that will create a challenge for us in terms of returns.
Sure. So that's what brings me to my second question is in terms of the management of the fund, is it going to be managed by a separate team, which will be earmarked and a separate management company will be formed?
There's separate there's a separate management company. I mean, there's a separate AMC, which will manage the fund. But there's a obviously, a fund is a separate entity in in a trust form.
The
team has been augmented, the investing teams. Now there's a team which will look at investments in the areas where you operate businesses, right, and M and A. And that is will be a strategic investment team.
That will be outside the fund, outside
the area? Outside the fund because that pool of capital is separate. The fund that has been the team that has been managing all the other investments so far will continue to manage those investments and will also run the new fund. So the old portfolio will be like Fund one in that sense in terms of time division and the new portfolio, the fund will be treated as Fund two, no no Steli, in terms of the time commitment. So the same management team will run both.
Okay. Interesting. Interesting. And we are currently in the process of raising some external money from select few LTVs?
There are conversations going on, yes.
Okay. And what is the target size for that for this fund now?
The target size is same. It's $100,000,000 I mean, INR750 crores. Never mind what the extreme rate is.
Sure. Sure. Okay. Thank you so much for your clarification.
Yes. The next question is from Sudhir Gundhapli from Uthila Lohswa. Sudhir, go ahead and ask your question.
Hi, Satish. Thanks for taking my question. I want to know your thoughts on a couple of aspects. Of the incremental sales or growth happening, especially in segments like matrimony, what part of it is coming from short term subscription packages like, let's say, three month packages, where some first time customers may just be moving online and trying out something during the lockdown period, either because offline options are completely switched off or because people have excess free time in hand? And how do you see the stickiness of these customers going forward as offline options open up?
See, most of our revenue comes from these short term packages only because when people buy, you know, they buy for three months, and then if they're happy, they renew for another three months, sometimes for six months. So, you know, so our average ticket sizes are in that ballpark only. So we haven't seen any major change in that, you know, because of COVID or because people being locked down. Will this revenue will this go disappear once, you know, offline options go? I don't think so because, see, the truth, we are getting this growth because we are advertising a lot more.
You know, what also happened in Q1 was that, you know, TRPs actually went up for most programs on television because people are locked in. Advertising rates were also lower. So, you know and I think in in in general, you know, people had more time, so they were searching they had had time to search. So going forward, we are already sort of like I said, we are already we already decided to up our sort of ad spend in MitraMini, and that should result in, more sort of profile acquisition. And once we acquire more profiles, it's only a you know, then then, you know, it's a premium model, then certain percentage of them will convert into paid customers over a period of time.
That's how it works.
Thanks. And the other thing is the comeback we are talking about in the job market. Right? What part of this comeback will you actually take at the face value? Because if you remember, after demonetization, the job market ex of IT companies bounced back in the immediate quarters, but the result and deceleration panned out much later over several quarters.
So in July and August, while the recruitment segment would have bounced back for, let's say, near term concerns around supply mismatch, so on and so forth, do you expect the actual impact to play out on a back ended basis?
Actually, don't know the answer to that question. A lot of it, I guess, will depend on what happens with GDP growth in the coming quarters. So Q1, we saw minus 24%. Now if Q1 turns out to be a minus 6%, minus 7% quarter, then it's very different. On the other hand, if Q2, sorry, it also turns out to be minus 20%, minus 15% quarter, then who knows.
So I think a lot will depend on how fast GDP comes back. If you see a V shaped recovery, hiring will bounce back quickly. On the other hand, if the market or the economy takes a long time to go back to where it was last year, then recovery will be slow.
Sure. Thanks, Satish, for those insights. All the best.
Next question is from Deepak Mehta from MetLife. Deepak, go ahead and ask your question. Hello? Is it there? Yeah.
Go ahead. Thank you for taking my question. My question is that how tough is the competition from LinkedIn Learning? As I have seen that many of the MNC are opting for LinkedIn. And is there any plan to tie up or acquire any learning option which can complement our Nocli business where we can map a skill and, you know, suggest some learning and this kind of model?
Thank you. See, there's been no sort of major change in the competition of LinkedIn. It is like it was a year ago, two years ago. In fact, we've acquired IIM Jobs, you know, so that's given us a play in the premium segment, at least on the MBA side. We're also investing more behind the high risk brand, which is owned by IIM Jobs, which is more premium tech brand.
So let's see how that plays out. We are hoping to use we were hoping actually to use our large NOCRI distribution with the fact that we work with 80,000 customers to take IAM Jobs to many of them. And we actually did a great job in Q4, but unfortunately, we got hit by COVID in Q1. So but once sort of once the market bounces back, we should be able to take Ion jobs, the Ion jobs offering to more customers in our stable. So let's see how that plays out.
So sorry, what was the other question?
So other question is about learning.
Learning.
So are we planning to tie up or acquire any learning?
So we are not looking
complement our our business, sir.
Right. So what we are not looking to do is create our own content or acquire content. But what we are certainly looking to do is, you know you know, aggregate courses, online programs and courses, and recommend them to job seekers. This is what we think makes sense for them. And this is what we think, you know, is a requirement of the job market and, you know, the skill gap in their CV.
So we certainly are looking to use our data, you know, and the insights we have on the job market and the sort of job career ecosystem to recommend the right courses to job seekers to help them upgrade their skills. But we are not looking to create content ourselves right now.
Okay. Thank you, sir. Best wishes for the coming quarters.
Thank you.
The next question is from Vivekananda Subraman from Ambit. Go ahead and ask the question,
Hi. Thank you very much for the follow-up opportunity. My question is on the investments planned in matchmaking. So why are we so gung ho about the opportunity in matchmaking? Why not spend more money on 99 acres, either by way of BrandX or expansion of presence in small towns, given that there is a lot of traffic from these markets.
So Hitesh, if you could just give some more color on the priority of our investments and how we think about 99 acres versus matrimony? Thank you very much.
No. So it's not an either or for us. You know, the way we are set up inside the company is that we have business units. Each business unit is run by a business head. Each business has a separate product team, a separate tech team, a separate sales team and so And each business draws up its own business plan given the business realities in that space.
As far as cash is concerned, we have enough money in the bank to be able to sort of bankroll both ninety nine Acres and Jeevan Sathi. And we are investing behind both. So we are certainly looking to expand ninety nine Acres to tier two cities, tier three cities. There's already a team working on it. We are making improvements to our platform on a daily basis.
We've sort of, you know, we've expand know, we started as a new as a resale platform. We then bought into new homes. We built a rental piece. We are looking to see how we can improve our commercial section on the platform as well. So, you know, we don't think 99 acres at this point in time requires a lot of ad spend.
But if required, we will sort of push the pedal on advertising as well. See, in 99 Acres, we are at least a leader. We may not be a dominant player like we are in Nocree, but we are a market leader. In matrimony, because we are not a clear leader, you know, we are not the number one player in the market, we are not even number two, only in the North investor are we number two, you know, there is a requirement to invest more. And and and the the strategy that we've been following in in in Match Money has been working well for us.
So we've been gaining share. We've been growing faster than the market and so on and so forth. So we just want to sort of push the pedal on this and do a little more of what we've doing already. So for us, it's not an eitheror. And, you know, clearly, yes, of course, you know, from a priority standpoint, Action and Era is a higher priority because it's our it's our second large business, and we see a great opportunity in it in the long run.
And our market position will also be here to the market position we are mentioning, but we believe we can do both.
Sure. Understood, Hitesh. Just one small follow-up there. So we see that the gap between you and the number two player, both in terms of the traffic share, know, including the app or excluding the app, that has that has actually that has actually gone gone down in the sense the gap between us and the number two player has gone down. And, you know, even in Google Trends, if we look at the brand versus, say, the number two player in some cities, are ahead.
So would it not make sense to spend more money on, say, performance marketing and brand advertising so that we are able to sustain the lead? And I'm just trying to understand why this doesn't concern you.
No, no. Can I contribute, Hitesh?
Yes, please. I'll answer it as well, but you can
Yes, yes. So Vic, it's like this. The two are not mutually exclusive. You can invest in matrimony and real estate. I think what Hitesh and the business owner of ninety nine Acres believe is that perhaps it's not the most opportune time to invest in that because the market is currently down, has been down for a while.
And as the market comes back, I suspect you may see investing up, but I'll let Hitesh answer your question now. This is just my view.
No, Sanjeev, you're right. See, I'll tell you. See, not every business can be built by just investing in marketing. See, the nature of the Jeevansati business is such that we need more profiles to counter competition because we are a number two, number three player in more cities. And that's where we believe, and that's the investment we think will work, make some most sense for that business.
It also crowds out competition. Our competition may not be in a position to react to our increased ad spends because given their sort of financial position. So that's the strategy which we think makes sense for JeevanSathi to pursue. In the case of ninety nine Acres, we don't believe at this point in time that by investing more in marketing, we can gain more share. Right?
We believe that we need to do a lot more sort of, work on many other fronts, if we have to build a sustainable sort of lead over competition. Now I don't wanna talk about everything here, but there are sort of many other areas where we are where where we want to invest. We want to work on the platform a little more. We want to improve our data quality. We want to improve the analytics we provide to our users.
We want to improve our algorithms. We want to improve our user experience in the mobile app a lot more. So there are a bunch of other things that we want to do in ninety nine Acres, which unfortunately cannot be done by just spending money. We need to get people, we need to build teams, we need to sort of let them do their stuff, And then hopefully results will follow. Now once we get to a level where we think, you know, we've got a sort of good platform, we've got, an edge over competition, then at that at that point in time, we may supplement and complement with even more aggressive marketing.
So not I'm not ruling on marketing spend going for more marketing spend going forward, but we believe that we need to invest in many other areas in Agilent Acres, if you want to move the needle on our traffic share and our market share in the long run. Short term traffic share, market share, would not worry about too much, but that's also often a function of how much you spend in that quarter versus your competition. And that's sort of those two, three, four points, which you lose in a quarter, you can gain back very quickly the next quarter if you just bump up the advertising a little bit. But we will not worry too much about that.
Understood. This was very comprehensive. Thank you and all the best.
The next question is from Utkash Solaparwala. He is from Damas Capital. Utkash,
of other key investing companies like Happily Unmarried, Gramophone, Swap, Iran and Bisch, Shoe Connect?
Yeah. So Shoe Connect was badly hit by lockdown for two months because it's a nonessential product. So roughly two months, they were shut, progress, April and May, right, starting March, actually. But since then, they have bounced back nicely on two fronts. One is business has come back.
It's not fully back to pre COVID levels, but it is very substantially back. And second, they managed to raise capital from external investor giving us validation. And these are blue chip marquee names. And they and now it's sufficiently capitalized and continues to grow, okay? Gramophone is, again, is essential because it's agri input e commerce, but even essential commodities were disrupted for a few days.
And Gramophone was disrupted for a few days, but has bounced back nicely again on this front. And it should be all right, but we are waiting and watching, right? Ustra, again, was badly hit because it was deemed nonessential. And then when sanitizers were deemed to be essential, they got back with a few sanitizers. But then eventually, in June, they launched again.
It is substantially back, but not fully back to pre COVID levels. And they have raised money from the external third party, and that's good news. So it gives us external validation. As far as Shopkana is concerned, they were impacted for a week or ten days, maybe two weeks, but now they are back to pre COVID and higher levels, and they're doing all right. So all of these companies so far are doing all right.
And the last is the you invested in a e a tech company called Coding Ninjas. That must do well in the in the in the COVID.
Yeah. So, Hitesh, you want to talk about Coding Ninja?
Yes. So we just invested in Coding Ninja. It's only been a few months. So it's a very small company. See, they have a coding business where they teach sort of coding.
That business is doing well. They were also trying to venture into another sort of that sort of again, the coding space, but with a different business model. That got impacted because, you know, because of COVID. But now that the situation is getting better, I'm sure the you know, they sort of again experiment in that area. Very early days for us.
We just invested a few months back.
Okay. Thank you.
So that was the last question we had for today. Over to you, Vivek.
Sure. Ladies and gentlemen, due to bad network today, you might have missed few parts of management response to your questions. Kindly read our transcript for more clarity on your responses. With this, I would like to hand over to Mr. Hitesh for his closing comments.
Thank you, guys. Thank you for taking time out for this call. And have a great evening, and stay safe.
Thank you. Bye bye.
Bye.
Thank you.