Ladies and gentlemen, good day, and welcome to the Info Edge Q3 FY 2019-20 results conference call . Joining us on the call today are Mr. Hitesh Oberoi, Managing Director and CEO, Mr. Chintan Thakkar, CFO, and Mr. Sanjeev Bikhchandani, Vice Chairman. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Hitesh Oberoi. Thank you, and over to you, sir.
Thank you. Good evening, everyone, welcome to our third quarter FY 2019-20 results conference call . Like in the past, we will start with the overall financials and then cover each business in more detail, followed by Q&A. As you would recall, we briefed you about the application of Ind AS 116 to our financials in our last quarter results call. For the sake of comparison with our last year's financials, we would also be calling out the respective numbers without adjusting for Ind AS impact in this call. The audited financial statements filed and other schedules on segmental billing revenues, et cetera, along with the data sheet, have been uploaded on our website, infoedge.in. Moving on to the standalone financials. Billings in Q3 were INR 299.5 crore, up 10.3% year-on-year. Revenue in Q3 was INR 320.5 crore, up 14% year-on-year.
Operating expenses, excluding depreciation for the quarter, were INR 214.6 crore, up 8.5% year-on-year. Operating expenses readjusted for Ind AS 116 stood at INR 221.3 crore, up 11.9% year-on-year. Operating EBITDA stood at INR 105.9 crore versus INR 83.3 crore last year, an increase of 27.2% year-on-year. Operating EBITDA readjusted for Ind AS 116 stood at INR 99.2 crore, up 19% year-on-year. Operating EBITDA margins for the quarter stood at 33%. Operating EBITDA readjusted for Ind AS 116 margins stood at 31%. Cash EBITDA for the quarter was INR 85 crore, up 8% year-on-year.
Deferred sales revenue stood at INR 457 crore as of December 31, 2019 versus INR 404.5 crore as of December 31, 2018, a growth of 13% year-on-year. The cash balance in IEIL and all its 100% subsidiaries stands at INR 1,514 crore as of December 31st, 2019. This was INR 1,869 crore as of December 31st, 2018.
The slowing economy has had an impact on our business growth across different verticals, especially Naukri. As stated in our earlier call, we continue to invest behind product tech, brand, and data science inside the organization. We also continue to invest behind our strategy of building our Jeevansathi brand, as is reflected in the high marketing spend in this vertical. We also continue to invest aggressively in adjacent businesses and marketplaces. Moving on to the consolidated financial highlights. At the consolidated level, the net sales for the company stood at INR 335.06 crore versus INR 290 crore in December 2018. For the consolidated entity at the PAT level, there is a loss of INR 62.12 crore versus a gain of INR 330 crore, in the corresponding quarter of December 2018.
Adjusted for exceptional items, PAT stood at a loss of INR 62 crore in quarter ended December 2019 versus a loss of INR 93.11 crore in the corresponding quarter last year. Let's move on to the recruitment segment. In Q3 FY 2019-20, recruitment segment billing were INR 210 crore, up 8.5% year-on-year, while revenues were INR 230.3 crore, a growth of 13.1% year-on-year. Operating EBITDA stood at INR 134.1 crore, up 20.4% from last year. Margins were at 58.3% versus 54.7% in Q3 of FY 2019. EBITDA readjusted for Ind AS 116 stood at INR 130.8 crore at a margin of 56.8%. Cash EBITDA for the recruitment segment during the quarter stood at INR 113.8 crore, up 10.2% year-on-year. In Naukri, in our last quarter call, we had shared our concerns about several sort of sectors in the non-IT market slowing down, sectors like auto, manufacturing, real estate, and BFSI.
This continued in Q3 as well, and we actually saw the slowdown spreading to other non-IT sectors like FMCG, travel, and retailing as well. Still, due to the key drivers on Naukri's growth, the IT and ITES segment was unaffected by the current slowdown, and that helped us. We are now witnessing a slight slowdown in our IT and ITES business as well, which is about 40% of our total revenue, and this impacted growth in Q3. However, on the job seeker side, on the user front and on engagement on the platform, we continue to do well. We saw strong metrics during the quarter. We had about 12,000 new CVs being added to the platform on a daily basis. The number of mods went up to 390,000 a day, and we had more than 500,000 active postings on the platform.
We reduced our marketing spend in Q3, given the tight market. We spent INR 6 crore as against INR 10.5 crore last year in Q3. In Q4, we don't see our marketing spend going up significantly. Similarweb, with the month of December 2019, has updated their app estimation methodology, and this change in estimation has been applied retrospectively from June 2017 onwards. For Similarweb, they have done this to improve reliability of their app data, and their app data is now at least 10% more accurate versus previous estimation, where the app was underrepresented. This change has impacted our app timeshare for both Naukri and 99acres. In the case of Naukri, the timeshare trend has remained the same over last year. The base has changed from 64% to 94%.
iimjobs, which is a business we acquired a few quarters back, reported a billing of INR 4.87 crore for Q3 of FY 2019-20. This is a growth of only 10% from Q3 of 2019. The business operated at a breakeven level during the quarter. Going forward, we have decided that the Naukri sales team will also sell iimjobs products to its customers. Let's move to the other verticals now. In 99acres.com, which is our real estate verticals, billings in Q3 grew 10.9% year-on-year to INR 54.3 crore, while revenue grew 15.3% to INR 58.2 crore. EBITDA for the quarter stood at INR 1.7 crore. EBITDA adjusted for Ind AS 116 stands at a nominal loss of INR 0.2 crore against a loss of INR 3.2 crore reported in Q3 of last year.
Cash loss for 99acres during the quarter stood at INR 2.9 crore against a cash loss of INR 3.8 crore last year. Overall collections in 99acres grew 11% in Q3, while expenses grew around 5%. All business verticals of new home, resale, and rental registered growth. Resale and rental grew faster than new homes in Q3 on a smaller base. Number of clients continued to show a healthy growth in both the builder and the broker segment. The average billing per client, however, saw some pressure in new home clients. Some of our builder clients continue to face pressure due to the twin factors of lack of liquidity/financing triggered by NBFCs' own funding woes and tepid end-unit sales in new homes. While nobody can say precisely when the market will sort of bounce back, we feel it may be a while before it recovers.
Live listings on the platform continued to increase and crossed the 1 million mark for the first time. Both broker and owner listings grew sequentially quarter-on-quarter. We continue to invest and focus on improving the platform experience in the business and drive more inquiry generation and repeat usage from our customers. Moving on to the matrimony business. In Jeevansathi, billings grew 27.4% year-on-year in Q3 to INR 22.4 crore and revenue grew 20.7% year-on-year to INR 21.4 crore. Operating EBITDA loss for Jeevansathi stood at INR 19.1 crore in Q3 FY 2020, up from a loss of INR 15.2 crore in Q3 of last year. EBITDA readjusted for Ind AS 116 stood at a loss of INR 19.9 crore. The cash loss for Jeevansathi during the quarter stood at INR 18.5 crore.
Most of this additional sort of loss was on account of higher marketing spends in the category, which helped us gain share. Moving on to the education vertical. In Shiksha, in Q3, billings grew by 11.4% year-on-year to INR 13.3 crore, while revenue grew 15.8% year-on-year to INR 10.7 crore. We made an EBITDA loss of INR 1.7 crore in Q3. EBITDA adjusted for Ind AS 116 stood at a loss of INR 2.2 crore versus a loss of INR 2.5 crore in Q3 of 2019. Cash profit for the quarter stood at INR 23 lakh. We continue to sort of put more efforts into getting more and more high-quality content on the platform. Moving on to our strategic investments. Zomato announced additional funding sort of commitment from up to $150 million from Ant Financial. They also announced the acquisition of Uber Eats.
With this, Zomato is now a market leader in food delivery. Zomato continues to drive efficiency across the organization. Early signs show that the acquisition is panning out well. Losses have been on a downward trend in Zomato for the last few months now. During the quarter, we also announced the sale of our stake in Meritnation for INR 50 crore and return of all outstanding loans amounting to INR 27.5 crore. Post-signing formalities are in process. Recently, we announced the setting up of an alternate investment fund, named Info Edge Venture Fund. The fund has been established with an initial commitment of INR 150 crore. We continue to invest new investment opportunities in startups through this fund. That's all from us this evening. Thank you. We are now ready to take any questions.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Anyone who wishes to ask a question at this time, they may please press star and one. The first question is on the line of Sachin from Perfect Research Equity Fund. Please go ahead.
Good evening, sir. I have a few questions, listing them together. Number one, how big is the size of the opportunity for Naukri.com in India? How much can be the overall market growth from here in the long term? Next one, what thought process do we have in purchasing small stakes in investing companies? Even if they perform, they may not give a meaningful return in the long run due to a small stake. For example, 5.36% stake in Qyuki Digital Media recently. The last one, given massive increase in the addressable internet population due to Jio, do we see a massive jump in our addressable market in the future? Thank you.
Okay. I think the first question was what is the opportunity for Naukri in India. It depends on how we define our market. In the segment we currently operate, which is a white collar, sort of active job seeker hiring space. We already work with 80,000 companies in the Indian market. As the economy grows, more people get hired, more companies set up shop, and our business will grow with the economy. Of course, we can grow at a faster rate if we are able to help companies hire more people through us, number one. Number two, if we are able to launch new products and services and get a higher share of their wallet. Number three, if we can enter new segments or adjacent segments to the ones we operate in. We are still a very small part of the total recruitment sort of spend of companies.
Nobody has the exact number, but I suspect companies spend, there are, for example, 8,000 or maybe even 9,000 recruitment firms we work with, which are sort of paid by companies. There are referral programs which companies run. There are advertising campaigns they carry out. The amount of money spent on recruitment is huge. Maybe a few billion dollars a year. We are still very tiny in the entire scheme of things. The opportunity is huge. It depends on how you define the market and what strategy we choose to follow going forward. Second question was around why do we pick up small stakes in investing companies. Sanjeev, yeah.
You gave the example of Qyuki. Look, that specific company, we've gotten at a slightly later stage than we normally do, and therefore the valuation is at a certain place. The issue is not how much percentage we own. The issue is how much X we will get from here, and how much money are we putting in. We are putting in about INR 3.5 million. Okay? Another INR 1 million, which is convertible in the next round valuation. INR 1.5 million. Right? A total of INR 5 million.
Total three and a half.
Total three and a half, sorry. Total INR 3.5 million . Really it's a question of where the company goes from here in terms of valuation. If you're getting into a slightly later stage company, then you've got to do, in terms of your return expectations, do a adjustment for a lower risk. Therefore, obviously, you cannot expect the same X in a later stage company as you would in an earlier stage company. Yeah.
Yeah. If I'm correct, if I remember right, your third question was around the size of the addressable market growing because internet penetration is growing. Right? You're absolutely right. As more and more people get onto the internet, and as they sort of spend more and more time on the internet, the addressable market for many of our sort of products and services will grow. For example, already a lot of our growth in Jeevansathi.com comes from tier 2 and tier 3 cities. It's coming from tier 2 and tier 3 cities. We're experimenting with the blue collar sort of platform. We are sort of toying with the idea of launching one at some point in time. If we were to do that, a lot of our users will be sort of people who've just got onto the internet in the last one or two years.
Of course, the fact that there are more and more people now on the internet, and they are spending more and more time on the internet, will in the long run sort of expand the opportunity set for our products and services.
Okay. Thank you.
Thank you. The next question is on the line of Mukul Garg from Haitong Securities. Please go ahead.
Thanks for taking my question. Hitesh, just wanted to focus a bit on the Naukri business. We know that you have been talking for last few months about overall macro slowdown kind of impacting growth. The billing growth was weaker than I think probably what you were also expecting at the start of the quarter. Is that a correct assessment? Given that you are seeing weakness in the IT space as well, how should we look at near term billing growth? Will it stay in single digit, or do you think this was more of an aberration?
Well, the truth is, I don't know. It's very hard for me to say what's going to happen going forward. What we had said on the last call is that we were taken a little bit surprised by what we saw in September. We were expecting higher growth in the quarter. September was slower than expected. The last quarter also turned out to be a slow quarter. Up till Q2, at least IT was holding. Last quarter, we saw IT services company also slow down their hiring. Now, this may be an aberration, this may be a temporary phenomenon. IT companies may bounce back. At the end of the day, they're not indexed to the Indian economy, they're indexed to what happens in the rest of the world. I don't know.
What we certainly saw was that the non-IT market slowed down even further in Q3. Markets like Bombay, markets like Delhi, growth in these markets was lower than growth in Q2 in these markets. These are primarily non-IT markets. Going forward, is the slowdown going to get worse? Are things going to get better? Only time will tell. A lot of our business sort of comes up for renewal at quarter end. We can't even go by what we are seeing in January. We will have a better sense of what's going to happen only in a couple of months from now.
Fair enough. On the margin side, there was very material improvement in the EBITDA margin during the quarter. Do you think there is more scope to squeeze cost through ad reduction if the billing growth remains weak? Do you think you will start seeing pressure on profitability if billing does not recover or revenue growth does not recover?
We are not slashing advertising. We saw our ad spend decrease last quarter, and that may be the case this quarter as well, unless competition becomes very aggressive. However, we don't want to slow down or sort of curtail our investments in, or reduce our investments in some of the newer products that we are building or the newer technologies that we are investing behind. Those investments will continue and, yes, if revenue growth continues to be in single digits for a while, then our margins will get hit, in my view.
Got it. I will get back into the queue, but just wanted to clarify the Similarweb number. If you can just repeat the market share, including and excluding Indeed.
What's basically happening here is that a lot of these third-party traffic measurement companies, they basically keep tweaking their methodology. Every time they tweak their methodology, the numbers which they report change dramatically. One, going forward, I would not read too much into what these guys are reporting because they sort of keep tinkering with their algorithms. For example, what they're reporting for Naukri is a 94% share, which, until some time back, was more like 65%. Do we really believe these numbers? Frankly, I don't know. I don't know whether we should trust them anymore. Our traffic is growing, our metrics are fine, so we don't have a problem, but it's not as if we have suddenly gained 30% share. It's just that they've changed their methodology. Right.
In 99acres.com, our share may have declined a little bit, but it's not as if we are getting hit in the market. It's just that they've changed their methodology. They may change their methodology again in the next six months, we will see a different number. I would take some of these numbers now with a pinch of salt. Basically, what is happening is that a lot of the traffic is moving to the mobile devices and to the app. Many of these sort of companies don't have a very good handle on how to count this traffic. Maybe this is what is leading to these periodic revisions from time to time in their methodology. They claim that they get better with every change, but we don't know how far they still have to go.
That's really clear. Thanks for taking my questions. I'll get back into the queue.
Thank you. Any participants who wish to ask a question at this time, they may please press star and one. The next question is from the line of Aman Jain as an individual investor. Please go ahead. Mr. Jain, you are not audible. Hello?
Hello.
Yes. Please go ahead with the question.
My question is, currently we have few businesses in our umbrella, which require good amount of management attention. Can you please explain why we are going and acquiring new businesses when our existing businesses need a fair amount of nurturing at this place?
I'm not sure I understood the question, but what you're saying is that our existing businesses require a fair amount of attention. Why are we going and acquiring new businesses? Is that the question?
Yes, sir.
Refer to iimjobs .
Which business are you referring to? We are investing. When we invest, we don't run those verticals. We have an investment team which manages the investments. From an acquisition standpoint, we haven't really acquired many new businesses. We just acquired iimjobs some time back, which is a small business, and which there are massive synergies with the current Naukri operation on that front. We believe that we can grow that business substantially given our distribution sort of muscle. As far as the internal businesses goes, we have a business unit structure. We have business heads in place for all our verticals, and they are fairly seasoned sort of people. They've been around for a while, and they focus only on the business which they run and nothing else.
My second question was regarding, referring to the last phone call where you were mentioning that you were funding startups in its early stage, by virtue of which you used to get a substantial amount of pay with a very little capital commitment. If we look at the last few acquisitions we have made, we are committing more capital and getting a relatively less pay as compared to what we used to get before. If you know, what made this change? What changes can be attributed to it?
Your voice is muffled. If I heard you correctly, what you're saying is, why are we investing more money at higher valuations in startups?
Yes, sir.
If the valuation is higher, you invest in someone, you will get a lower stake. Really the issue is, you assess the business to see the stage it's at. If it's a second or third round where they're raising capital at, and they're already doing about INR 60 crore, INR 80 crore, INR 100 crore of revenue, the valuation will be higher. The risk will also be low, right? We take these calls. We get some right, some wrong. Hopefully, the ones we get right will more than outdo the ones we get wrong, and that's why it's panned out there. That's early-stage investing. We don't believe we are over-invested. We believe we are doing fine, and we will continue with that strategy.
Sir, these things can be attributed only to the valuation side and nothing apart from that, no?
Sorry, I didn't understand your question, sir.
This change is mainly attributed to the valuation, or in which stage we are and nothing apart from that?
No, the valuation would depend.
Understood
on the prospects of the company, the stage of the company, how much revenue it's doing, is it building IP, quality of team, is it a market leader.
Yes
Is it getting natural traction, upside of opportunity? We look at maybe 10 or 15 or 20 things before we invest, and each business will get a different valuation in our estimation.
Thank you.
Okay.
Thank you.
Thank you. The next question is from the line of Prince Poddar from JM Financial. Please go ahead.
Hi, sir. Three questions, actually. One, on the marketing spends, I think most of the marketing spend was decreased from Jeevansathi.com. Still we have seen a very strong growth in the top line of Jeevansathi.com. Can you explain a bit what led to this growth?
No, actually we didn't reduce spend in Jeevansathi.com. We upped our spend in Jeevansathi.com by over 25% this quarter, and as a result of which we got more profiles, and as a result of which we got more revenue growth. We decreased our spending in 99acres.com and Naukri.com, but upped our spending in Jeevansathi.com this quarter, last quarter.
Okay. Sir, the second question is on the blue-collar space, where we are trying to do something. What are the challenges, if any, we are facing in the blue-collar space? What are we doing to crack that space? Is there anything specific we have been working towards?
No, see, we are right now, it's very early days for us. We have just built a small product. We will test market the product in one or two markets. Depending on that response, we'll go back to the drawing board and make changes if required. It's very early days. We are looking at the blue collar play as a very long-term play. Maybe we'll have something to report in about one year from now.
Okay, that's fair.
Yeah.
Then, sir, the last one, which is very critical to understanding, does this creation of AIF change anything? We have seen in the last few weeks, there has been an increase in pace of investments. I understand that we invest mostly as the companies come to us, and if we find a good opportunity. Somehow it feels like after the creation of the AIF, the pace of investments has increased. Does that change anything, that creation of AIF?
No, the pace of investment has not increased. The point is it took four, five months to float the AIF.
Right.
While that was happening, there were deals that we were talking to and keeping them warm and parking them. The moment the AIF happened, those deals came in for investment. It's actually a backlog of deals that have come in suddenly. It's not as if pace of investment has gone up. As far as the strategy is concerned, in the AIF, nothing really changes. We are still focused on the same sectors, same stage of deals. The AIF was done for multiple reasons. First, it infuses more discipline and rigor in the investing activity. It also puts some prudence and discipline in how much exposure you'll take in a single company. It also keeps one eye on exits as far as financial investments are concerned.
Right.
It's also more entrepreneur-friendly from an angel tax perspective. It helps us to attract really high-quality talent in the investing activity. That's why we did it.
We can assume that all the investments and follow-on investments will happen through this AIF going forward?
As was said earlier in the press release, that the follow-on investments in the earlier companies will happen from Info Edge subsidiaries.
Info Edge Ventures.
Fresh companies will be invested in, financial investments, not strategic.
Got it.
Financial investments will happen through the AIF. The follow-on rounds in that will also happen through the AIF. There's a separate team now for strategic investments.
Right
which is going to look at startups and investments and acquisitions in strategic areas, which are recruitment, real estate, matrimony, and education placements.
Right. Okay, that's it. If I can squeeze just one more question, sir. Last quarter we have been saying that most of the money raised in QIP was staying, and we had not been using that money for 99acres. This time around, I see a big amount of money seems to have been already used, which is about INR 350 crore out of that INR 750 crore. Can you just clarify what all this investment has gone into in 99acres?
I'm not sure whether you have the facts correct. I don't think there is any INR 350 crore investment in 99acres. I'm not sure if there is something around capital reduction that has happened, and if you are kind of, INR 350 crore, if you are confusing with that.
Okay, the utilization of funds up to December 31, referring to that. I'm not sure if that is.
There is a reporting requirement that has changed, and which require us to present all the investment that would have happened up till date.
Okay.
There's a new requirement from SEBI to disclose from QIP funds what we have invested. This is the first time that we are disclosing that.
Okay.
I think it's a cumulative amount that you might be referring to.
Yes. That.
It's a five years investment that you are referring to. This is nothing that one quarter, we are just saying that's a cumulative amount for all the five quarters.
Yes.
There was no such requirement earlier, so I think that's why.
Okay.
You know.
Got it. That's all from my side. Thank you, sir.
Thank you. The next question is from the line of Mukul Garg from Haitong Securities. Please go ahead.
Hey, thanks for taking my question again. Sanjeev, just wanted to quickly check on the Zomato side. I think you guys are saying that the migration from Uber Eats was quite smooth. Can you just help us, what is the methodology you guys are following to measure how many people have successfully migrated and have started ordering via Zomato app? If you can just update us on the burn rate as well.
Look, burn remains where it was a couple of months ago. It hasn't increased materially since the Uber acquisition. Number one. Number two is when you say migration is successful, the company is not revealing specific numbers.
Okay.
It means that everybody or a large percentage of people who came to the Uber app and tried to use it, so a large percentage of them downloaded the Zomato app and ordered. Right? The company is not revealing specific numbers on this. What they are saying is that we are now number one in orders and we are also more efficient.
Understood. In case of ordering on the Zomato app for Uber Eats users, you guys have some data in terms of what percentage has actually placed an order versus how much they were kind of doing on Uber Eats? Anything you can share there?
The company has not revealed any data for competitive reasons.
Fair enough. That was primarily what I wanted to check about. Thanks for taking my question.
Thank you.
Thank you. The next question is from the line of Srinath V from Bellwether Capital. Please go ahead.
I just wanted to find out what would be the traffic growth in 99acres.com and Naukri. If you could kind of share some % growth numbers. Also wanted to find out, in the AIF structure, are we looking to raise outside money and create a fund structure out of it, or is the AIF going to be completely a captive operation?
Let me take this AIF investment. Right now, we have the approval from SEBI and we have kind of registered ourselves. We have, as we said, that we have kind of done the initial commitment of INR 150 crore and as we go forward, we will look what more commitment is required. Just to kind of clarify, it's actually it does that because the AIF is a more tax efficient and in many other ways it's a more kind of investor-friendly vehicle that we have adopted it. Earlier, we used to invest through subsidiary companies. Other than that, as Sanjeev also earlier explained that in terms of the philosophy, in terms of how we operate and all that, I think it's more or less same. As we go along, we can take a call if we wish to that: Do we need to get money from outside?
Right now we don't think that we have any intention to go out in market and raise money for AIF.
It's just a structure change, but nothing else changes.
No.
It'll be same.
Look, the options are open, right? Look, let me put it this way. In the last three years, we invested close to INR 800 crore from our own balance sheet or from our subsidiary balance sheets. Right? We see no reason to change that pace of investment in the next three quarters going forward. Now, we have no announcements to make as of now on raising capital from outside. As of now, we've capitalized it. As we go along, we take a call.
Okay. If you could share some traffic growth numbers, percentage growth numbers for 99acres.com and Naukri. Given the slowdown, is it affecting traffic or is it largely only affecting the monetization piece? Just wanted some clarity on that.
Traffic is still growing both in 99acres.com and Naukri, but for competitive reasons, we don't give out growth numbers.
Okay. Thank you.
Year-on-year. Yeah.
Thank you. A reminder to our participants, anyone who wish to ask a question at this time, they may please press star and one. The next question is from the line of Ashish Das from Sharekhan Limited. Please go ahead.
Hi, thanks for the opportunity. Question is on 99acres.com. Look, I can see that number of paid listing has bounced back the growth, actually. Our revenue growth is moderated. Could you just indicate our realization has declined there or number of paid listing volume has not converted much?
See, right, number of listings on the platform has grown. We saw dip in realizations in our new home business, which is not really a listing business where a lot of the sort of spend is on marketing solutions on the platform. We saw a dip in that, and that's why revenue growth is not in line with listing growth.
Okay. Can you give us some outlook on this business? We have seen the increase in the number of listing. How are the markets and how do you see in coming quarters?
See, the market for real estate continues to be very sort of tough. We've seen a lot in this sort of space over the last few years, starting with demonetization and then RERA and GST and now the NBFC crisis, which is hurting both developers and is making it harder for people to get loans and stuff. In pockets, there is activity and there is action. On the whole, the real estate market continues to be tight. There aren't too many buyers in the market
New launches have taken a beating over the last few quarters. There is some sort of movement on cleaning up inventory, old inventory. Government is trying to do a few things to ensure that projects which were stuck for a long time see the light of day. It's a long sort of haul. At our end, we continue to focus on improving the experience of users on our platform. We're sort of investing more in our content quality. We're investing more in our algorithms and trying to improve our user experience. We are trying to get more supply onto the platform. We continue to work in all these areas. It's going to be a while before the business starts growing at a very healthy rate once again.
Okay. Thanks. My last question is on jeevansathi.com. You highlighted that a lot of investments on branding side or marketing expenses has done, and I believe you must have gained some market share because a lot of listing has come on your platform. Is it sustainable or how is the competition you see in the matrimony segment?
There is a lot of competition in this space. There are three players, us, Matrimony.com, and Shaadi.com. In the North and West, we compete mostly with Shaadi.com. In the South, we don't really have a big presence. Ad spend of all the three players have gone through the roof in the last couple of years. At the same time, all of us have been discounting heavily in the market to acquire customers. On the one hand, there is pricing pressure, and on the other hand, customer acquisition costs have gone up. We upped our spending in this space, as a result of which we have gained share. The number of registrations we get on a day-to-day basis is up over last year. We've made inroads in certain markets where we were very weak.
If we have to continue to do well, we will have to continue to invest, and we are prepared to do that.
Are you doing branding activities in the other segments where you are actually weak in the Southern and Western side?
No, no. We are focused on a few markets. We don't want to spread ourselves very thin. We are not very active in the South. Most of our marketing activity is in the North and Western parts of the country still.
Okay. Thank you so much.
Thank you. The next question is from the line of Manish Poddar from Nippon India AIF. Please go ahead.
Hi, sir. I just wanted to get a sense that the two investments, namely Zomato and Policybazaar, you had done them generally at the end of the down cycle last time. This time across, given the outlook which you're giving for Naukri, you're doing a lot of investments right now. Are you trying to insist that the down cycle is done and this is the right time to invest, or how is that? I just want to get your thought process right now.
There's no strategy like that. There's no thinking of that nature, that this is when we invest more and we invest less. We invest when we believe that this is a good company, and it's the right valuation, right team, right market, right opportunity, and then we invest. Just to correct you, we invested in Policybazaar in 2008. That was not at the end of the down cycle. That was actually boom time, and it was just before the Lehman crash, where the market was really high. We invested in Zomato in June 2010. I mean, the market had tanked and was coming back a bit, but it was not as if the economy was doing well. The market had come back in 2010 after a very bad year in 2009. Actually, none of those were down cycles.
We don't time investments whether the market is up, market is down. In startups, we don't do that. In startups, we invest behind good startups that have good people pursuing good ideas, and you evaluate on several criteria, and then you invest.
Correct. Thank you.
Thank you. A reminder to our participants, anyone who wishes to ask a question at this time, they may please press star and one. Next question is from the line of Aditya Patade from Fortune Wealth Management. Please go ahead.
Yeah, good evening. I wanted to ask one question about the AIF. I just wanted to know that, is this new AIF rolled up in your consolidated statements?
No. This AIF has come only in January now. We are now talking about the December one, so obviously it is not included.
No. Going forward, how will it go?
We will look at what the accounting requirements are, and I believe that SEBI has also come out with some new guidelines very recently around how to go about the NAV and how to disclose it and all that. We'll look into it, and if it is required, obviously we'll consolidate.
Okay. Thank you so much.
Thank you. A reminder to our participants, if you wish to ask a question, please press star and one. We have a follow-up question from the line of Srinath from Bellwether Capital . Please go ahead.
Hi. I just wanted to find out the broker contribution in 99acres.com is significantly increased over the past, say, 2-2 and a half years. Just wanted to understand what specific actions have we taken in that particular market to kind of see a significant mix change. Also, as of last quarter, we have about 20,000 brokers that we built. What kind of market penetration, is there any way that saying out of X number of registered brokers, we would have a 20% share, 30% share? Is there any kind of indication on market penetration you could give on the broker side? That would be nice.
It's not as if we have gone after brokers or we have a very active program in place to get more brokers on board. We've expanded the sales team a little bit, and that's helped us get more customers on the ground, more brokers on the ground. Maybe it's also the nature of the market. Maybe the market is moving towards more brokers in certain cities. Like Delhi has always been a broker-heavy city, but the southern markets had very few brokers till some time back. Maybe that's changing a little bit as time passes. The number of brokers may have gone up, but it's not as if the percentage of business we get from brokers has gone up significantly. Just that the number of brokers, because of our sales expansion, may have gone up over the years. Sorry, what was the other question you asked?
We have listed that we have about number of customers, about 20,000 broker customers, which has actually gone up from, Yeah, 15,000-20,000 . It has seen a significant growth over the last two years.
Yeah.
Given the current market situation. I just wanted to understand what kind of penetration, if it's a difficult question, where there's a lot of unregistered brokers and so on. If you could give us a feel on what would be the penetrations that we would have in that particular market.
Very hard to say because you don't have to register to become a broker in India, there's no data available on this. Brokerages are different from agents. The number of brokerages or sort of firms which employ more than, let's say, X number of people in the broking business, I don't think that number is very large, and we have reasonable penetration in that set. The number of people freelancing, agents, people sort of working on their own, out of their own houses and doing sort of such activity is very large. We have no way of knowing how big that market is.
Even post-RERA, there is no
RERA is mostly for new homes. RERA sort of only people who are channel partners who sell new homes are the ones who need to register with the RERA authority. There are lots of brokers who do resale, rental, commercial property, small deals here and there. There are brokers, and there are sub-brokers, and there are agents and sub-agents. It's a very large number of people who are employed in the industry. The number of brokerages or sort of companies or firms which employ at least five people is not very large, and there our penetration rates will be very high.
Okay. Thank you.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one on your phone. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Hitesh Oberoi for closing comments. Thank you, and over to you, sir.
No, thank you everyone for being on the call, and have a great evening. Thanks.
Thank you very much. Ladies and gentlemen, on behalf of Info Edge India Limited, that concludes today's conference. Thank you all for joining us, and you may now disconnect your lines.