Info Edge Says Further Worsening Of India Slowdown Could Impact Business
If the economic slowdown worsens, it could impact everyone, even if a company is doing well, Info Edge’s CEO Hitesh Oberoi says.
Info Edge (India) Ltd. said further worsening of the economic slowdown in India won’t bode well for its business.
“If the slowdown worsens or is sort of long, of course our business will be impacted,” said Hitesh Oberoi, managing director and chief executive officer at the Naukri.com operator.
“The thing about a slowdown is that even if a company is not in a slowdown, but the sentiment is that of a slowdown, clients start negotiating, delaying decisions, and putting off manpower requests,” he told BloombergQuint in an interview.
While the job-posting website hasn’t yet felt any major impact of the slowdown on the back of continued hiring in the IT sector—which forms 40 percent of its business—Oberoi said if the India slowdown worsens, it could impact everyone, even if a company is doing well.
“The company really doesn’t know what’s going to happen going forward, but for the last two or three quarters we have been growing at 18-20 percent because IT markets have been growing at more than 20 percent and the non-IT markets have been growing at about 15 percent for us,” he said. “However, if the non-IT market slows down further, and growth there falls to 8-10 percent, then it could impact our business.”
The Indian economy grew at its weakest pace in six years in the quarter ended June. Demand for consumer goods to automobile companies tumbled as Indians rationed their spending. That even slowed the country’s hiring activity.
Real Estate
The new home market has virtually collapsed, and the real estate market continues to be tight, Oberoi said. “Prices have not really gone up in the last six to seven years. In real terms, real estate has depreciated.”
The real estate slowdown, according to Oberoi, has deepened in the last year or so. “That’s because of a lack of financing for developers and for homebuyers. As a result, developers are putting off new projects and new launches are getting delayed,” he said.
India’s real estate developers have been struggling to raise funds as lenders turned selective after surprise defaults by IL&FS Group companies in September last year. That, coupled with a slowing economy, stalled a nascent recovery from the disruption caused by demonetisation and a stricter housing law that armed homebuyers against frauds.
While that affected sentiments in the real estate market, Oberoi said it hasn’t really affected Info Edge’s business. The company’s real estate vertical—99Acres.com—is still growing due to a shift in advertising spends from offline to online media, he said.
WATCH | Info Edge CEO Hitesh Oberoi on business impact of India Slowdown