Q1 has seen a decline of 44% on the billings front. However, there was a stable EBITDA. What led to it? You have also seen better profit growth this time around.
Of course, we were impacted by the lockdown in April and May and that resulted in billing stopping by 44% but revenue was down only 10% because we benefited from deferred revenue of previous quarters. As you know, we collect money in advance from our customers and that is frozen into the next few quarters as we deliver the service. The billing growth of the previous quarters helped us and resulted in revenue decline of only 10%. Cost declined by about 17% and therefore EBITDA went up. But yes this billing growth will impact revenue growth in the coming quarters.
Can you give us an indication of the extent of damage?
Yes Q1 was very badly impacted by both 99acres and Naukri. Requirement billings were down 44%. In fact real estate billings were down 71% actually for the company. But we have seen a recovery of some sorts in the last couple of months. Traffic on all our portals is back to near base level and we are back to where we were at the same time last year. On some metrics we are showing healthy growth.
In July and August, our billings were tracking at 80% of what it was last year. So there has been a handsome recovery in July and August but let us see what happens going forward. This is still very early days in the recovery and this has to sustain for us to sort of be able to say certainly that this is how sort of things will be going forward. So it is a wait-and-watch situation. Let us see what September is like. September is our biggest month in this quarter, almost half of our collections happened in September. So if September is good, that will give us much more confidence going forward.
What are the trends in the job market considering Naukri has been relatively resilient? Which are the sectors that are hiring and what are the trends you have seen in July and August?
In July and August we have seen job seekers come back with a bang. So job seeker activity on the site is at an all-time high. We are seeing more app downloads. We are seeing more applications, more resumes being modified, more people registering than ever before so that is very good news. Recruiter activity which had slowed down considerably in April, May and June, has also started inching up. We are back to 65-70% levels in Naukri and certain sectors are, of course, doing better than others. We have seen a handsome recovery in IT. We are seeing reasonable sort of activity in sectors like healthcare, education, pharmaceuticals, insurance. But sectors like travel, hospitality, tourism, retailing, apparels all these sectors continue to be impacted by the slowdown. They are yet to show any signs of recovery.
Matchmaking has really created a frenzy on OTT. How has the Jeevansathi business done?
Jeevansathi was actually the only business in our portfolio which did well in Q1. It kept growing through the lockdown as well. Jeevansathi billings grew by 13% in Q1 and in the month of July and August the billings growth has been even better. In August, we grew billings by 23% in Jeevansathi. So that business has not been impacted by the slowdown. We are seeing more registrations, more activity on the platform. We have also upped our marketing spend in Jeevansathi and that is also helping. We are gaining share.
Anything coming up in terms of strategic opportunities — be it a strategic stake across your businesses, M&As — anything of that sort?
We are constantly on the lookout for investing in or acquiring both for strategic and financial purposes. We have an AI of sorts through which we make our financial investments. Then we have an active corporate development team which looks at strategic sort of investments for the company. We just finished raising $250 million through our QIP. So we are now sitting on close to Rs 3,300 crore of cash.
The purpose of this QIP was to look around for acquisitions and inorganic sort of opportunities in the spaces we operate. Our preference would be to do a deal at some point in time in the next 12 to 18 months in either matrimony or real estate or education. These are the verticals we run inside the company. We are constantly scouting but as you know the good opportunities are hard to get but as and when we get them, we will be ready to move quickly.
ET Now: What has the traction been on Zomato? Do you see a further upside on the valuation now?
Hitesh Oberoi: Zomato also had a terrible Q1 but business has come back strongly in Q2. The dining out part of the business has been more impacted because many of the restaurants are still shut but delivery is picking up. The company has done a very good job of cutting burn.
Burn is now down to maybe $2-3 million a month from maybe $30-40 million a month a year ago. So, they have done a fantastic job on that front where unit economics is improved. They are making a profit per order now where they were losing maybe 35-40 cents to an order earlier.
So all is well. At least things are getting better on the business side. There are lots of inbound invested interest in the company. The company is already sitting on a lot of cash but there are many investors interested in picking up a stake in the company. That is all I can say right now.
Globally governments are not very comfortable with Chinese investments. Does that bother you?
Not really. I have said this before. There is no shortage of money right now flowing into India. If you have a good business and if you continue to sort of do a good job of growing your business, then there is no dearth of investors. Right now in Zomato, we are speaking to investors in the US, Singapore and many other parts of the world. I do not think there is a dearth of money for companies running quality businesses.
Info Edge is a bet on the human cycle. The first thing you need after graduation is a job, you got Naukri; then you need to get married and you got Jeevansathi; then you need to buy house and you have the real estate portal and then you need to eat out and keep yourself safe you got Zomato and PolicyBazaar. Is my assessment right?
Well I do not know but what Covid has told us is that the world is all about essential services and clearly some of the services we offer are essential in nature to more middle class Indians.
How will the next three years be different for Info Edge from the last three years? Are you looking at investing more? Are you looking at making some of your existing businesses more profitable? What would you be focussing on – profitability more or investments more?
On the whole, you will see a more aggressive Info Edge. Of course, a lot will depend on what happens to India as a whole. At the end of the day, our businesses are index to GDP growth. We are hoping that GDP growth will come back if not tomorrow, maybe in a couple of quarters and all will be well again with India. Then the secular sort of growth story of India will continue because you cannot get people jobs if there are no jobs, you cannot make people buy houses if they do not want to buy houses.
So hopefully, once things go back to normal on the India front, you will see a more aggressive Info Edge. We are very well positioned. Our Naukri business is very profitable and the two other categories we operate in are matrimony and real estate.
We are upping our investments significantly. We are gaining shares. We are sitting on three-and-a-half thousand crores of cash right now.
This cash should be used to invest in our existing businesses. We will also be looking out for organic opportunities to grow in the verticals we operate in. Covid crisis is likely to throw up opportunities because a lot of companies have been very negatively impacted by it and hopefully there will be many more opportunities going forward than there were in the last three years.
On the management side also we have really beefed up our management bandwidth. We have hired a lot of good people. The company has been through a major transformation for the last three to four years. We have got a lot of high quality people in the company, a lot more management bandwidth than earlier. We believe that we can do a lot more going forward so let us see how it plays out.