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Motilal Oswal Report
The complete impact of the Covid-19-led lockdown was seen in the Q1 FY21 financial performance of Info Edge India Ltd. with billings decline of 44% YoY.
The drag in revenues (down 10.4% YoY) was curtailed due to the subscription based model of the business.
The company has shown a high resilience in the margins (up 420 basis point YoY) on account of superior cost optimization.
For the first time, the company was able to show gains from investee companies, primarily led by positive contribution margins from Zomato.
Traffic on Info Edge’s operating portals has inched up to pre-Covid levels. Billings and revenue should follow a similar trend (in that order).
Given the company’s market positioning, multi-dimensional growth may be expected across its core businesses in the medium-to-long term.
We expect long-term growth trends to play out at its operating entities, whose margins continue to inch up on high operating leverage.
Furthermore, led by an inclination for profitability in investee companies, we expect consolidated losses to be curtailed over time.
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