Billing in the third quarter was at Rs 297 crore, down by 1 per cent as compared to the corresponding quarter in FY20. The deferred sales revenue (amount collected in advance) as on 31 December 2020 was Rs 393.5 crore, down by 13.9 per cent over the quarter ended 31 December 2019. Operating Ebitda declined by 35.6 per cent to Rs 68.2 crore in Q3FY21 from Rs 105.9 crore in Q3FY20.
Profit before tax in the quarter also slipped 21.4 per cent YoY to Rs 87.45 crore from Rs 111.24 crore in Q3FY20.
Analysts at JM Financials believe that while the upcoming listing of investee companies continue to support near-term stock momentum, valuation appears to be stretched which limits constructive case.
"Noting the improved macro environment which is also reflecting in sharp billings recovery, we raise our revenue estimates by 3-5 per cent over FY21-23E. However, we also factor in higher A&P spends on account of growing competitive intensity in 99acres and Jeevansathi that leaves our EPS estimates broadly unchanged for FY22/23E. We introduce FY24 financials and roll forward to Mar’24 for the Core business (valuing it at 60x vs. 50x earlier) even as Investee companies continue to be valued at similar multiples of recent fund raise," it said in a results update report. The brokerage has 'Hold' rating on the stock with a target price of Rs 4,980.
On similar lines, analysts at Edelweiss Securities have 'Hold' rating on the stock with a target price of Rs 5,460 considering the core business's steep valuation.
"IEL continues to be one of the strongest diversified internet franchises in India. With traffic roaring back, revenue and collections should bounce back over the next few quarters. As relevance and long-term prospects for internet companies have improved significantly, we are raising the target multiple across businesses," it said.
Those at Kotak Institutional Equities, meanwhile, have 'Sell' rating on the stock as it also believes long-term growth prospects are more-than priced in.
"Naukri's deferred revenues and billings declined 14 per cent YoY and 4 per cent YoY, respectively indicating that pre-Covid revenue run-rates are yet to be reached. The number of paying customers is lagging the recovery in platform usage," it noted in its result update note.
It also added that while Info Edge, with a cash balance of Rs 3,500 crore as of December 2020, is evaluating acquisitions but it hasn't sealed anything yet. "We make minor tweaks to our revenue and EPS forecasts. The FY2021 EBITDA revision is on account of higher loss estimate at Jeevansathi. EPS cut is higher as we bake in lower other income (align with 9MFY21 run-rates). Our SoTP-based Fair Value increases to Rs 3,170 from Rs 2,910 earlier," it said.
That said, foreign brokerage CLSA maintained its 'Outperform' rating on the stock with a revised target price of Rs 5,740 from Rs 3,580 to factor in an improved long-term growth outlook and to capture higher valuation for its stake in Zomato
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