Info Edge Stock Hits A Record High As ICICI Securities Ups Price Target, EBIT Estimates
Shares of Info Edge (India) Ltd. jumped to a record high after ICICI Securities raised its price target and upgraded EBIT estimates for the company.
The brokerage suggests a ‘buy’ on the company that runs Naukri.com, the nation’s leading job-hunting platform, and hiked its price target from Rs 6,300 to Rs 8,050, an implied upside of 30.18%, according to its report.
According to ICICI Securities, “rethinking of work, family responsibilities and flexibility by employees” is driving massive supply-demand mismatch across industries, boosting the need for ‘search’ platforms like Naukri. That, it said, is driving “strong traction” in online realty too (99 Acres), further led by low interest rates, new launches and online shift.
The brokerage also expects a sharp pent-up increase in matrimony platform Jeevansathi’s paid listings as wedding restrictions ease and most of the about 1.7 crore deferred weddings come into planning pipeline.
Here are other highlights from ICICI Securities’ report...
Sees further headroom for hiring, even accounting for technology-led productivity gain.
Daily active users of 99 Acres in July 2021 was 28% higher from
that in February — before the start of the second Covid wave.
Lockdown-led limitations to traditional matchmaking aided traffic share gain for matrimonial sites from physical channels.
Incipient signs of rising demand are already being visible with Jeevansathi’s downloads rising exponentially.
Info Edge is the best proxy on the grand job-wedding-housewarming party.
Given the improved growth and margin outlook across segments, the brokerage upgrades FY22E-FY24E EBIT estimates by 23%-35%.
It, however, trims other income estimates, primarily led by the lower-than-earlier-expected quantum of cash proceeds from Zomato’s IPO (Rs 380 crore v/s Rs 750 crore).
Values Naukri at 75x FY23E EPS. Values 99 Acres and Jeevansathi each at 20x FY23E sales.
Factors in a holding company discount of 15% on the listed/to be listed investments of Infoedge.
Impending IPO of an investee firm will be a key catalyst.
Covid third wave can be a risk to the brokerage’s estimates/target price.
Shares of Info Edge rose more than 8.6% to Rs 6,718.35 apiece around noon on Wednesday. Nine analysts have a ‘buy’ rating on the company and eight each suggest a ‘hold’ and a ‘sell’, according to Bloomberg data.
The relative strength index on the stock was above 70, indicating that it may be ‘overbought’. It trades at 226 times its estimated earnings per share for the coming year. The scrip’s trading volume was about 3.7 times its three-month, full-day average.
Info Edge shares have surged about 30% since Zomato listed on July 23 as investors saw it benefiting from its stake in the operator of a restaurant delivery app.