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India’s Profitable Pure Play Online Company

Info Edge (India) Limited (“the Company” or “Info Edge”) owns India’s largest job portal and holds a diversified standalone portfolio in matrimonial, real estate and educational space. Other than that, the Company has 11 subsidiaries and holds a significant amount of investment in its investee companies such as Zomato,, etc. It has a network of 62 offices in 43 cities across India and employs 4,049 employees as of FY20. The Company is also present in the gulf market with offices in Dubai, Bahrain, Riyadh and Abu Dhabi.

How was Info Edge Born?

Sanjeev Bikhchandani, born in 1963, belonged to a middle-class family. He graduated with a degree in Bachelor of Arts with a specialization in economics. In 1987, he went to IIM Ahmedabad to pursue his PGDM and was later hired by Hindustan Milkfood Manufacturers (HMM) Limited (now known as GlaxoSmithKline) as a Product Executive to handle the marketing of Horlicks in 1989.
In 1990, he left HMM and started two companies, Info Edge and Landmark, with a co-founder. In their early days, they used to operate from the servant quarter.

At Info Edge, they used to take surveys like what companies are offering MBA and engineers at entry-level jobs and at landmark they were doing trademark searches.
In 1991, the Department of Telecom announced that they were looking for a private information provider, who would own and maintain the database to launch a videotext service. They were not going to pay them anything for the database but the revenue would be slit when the user would pay. Their application was shortlisted among 30-40 applicants, but later the project got cancelled. They tried a lot of ideas to do something with the database but nothing worked out, and hence they decided to keep it aside.
Sanjeev and his partner split their ways in 1993 and each partner got one Company and half of the employees and assets. Sanjeev got Info Edge and the database.
In 1996, while attending an annual event of the IT Asia exhibition in Delhi, he came across a stall where he learned about the email account, internet and its potential. The fact that 14,000 people were using the internet at that time, gave him a million-dollar idea.
During his days at HMM, his colleagues used to go through 35-40 pages of the Business India magazine for job postings. He realized there wasn’t a single source for job ads. Hence, with the idea of the database created earlier, he collected 1000 ads from 29 newspapers and various magazines and created a database of resumes, jobs and recruitment consultants and launched a website to serve as a platform where job seekers and hiring managers met. Thus, in 1997 was born, since the economy was in recession during the mid-1990s, the app received a lot of traction.
In the first-year, the Company earned Rs.2.35 lakh and the figures jumped to Rs.18 lakh in the second year. In the view of increasing competition, Sanjeev decided to get a venture capitalist and Naukri received Rs.73 crore from ICICI venture for a 15% stake in 2000. In 2006, the Company became the first dot com company to get listed on Bombay and National Stock Exchange.

India Digital Sector

  • Info Edge operates in the digital sector of India. As per India Brand Equity Foundation (IBEF) July 2020 report, Indian e-commerce industry is expected to reach $200 billion by 2026 and is expected to surpass the U.S. to become the second-largest e-commerce market in the world by 2034.
  • The main reason for this growth is the rising internet penetration in India, which has been growing at a CAGR of 24% between 2007 and 2019.
  • As of 2019 there are 718.74 million internet users India, second highest globally and is expected to reach 835 million by 2021.
  • India is approximately adding 10 million active internet user each month, which is the highest in the world, with the highest data usage per smartphone at an average of 10.40 GB per month.
  • In the Union Budget 2020-21, the government allocated Rs.8,000 crore to BharatNet project to provide broadband services to 1,50,000 gram panchayats in India.

Business Model

Info Edge started with a classified recruitment online business, and further diversified in different spaces viz. (Online Matrimonial), (Online real estate listing) and (Online education). Therefore, the Company has a diversified standalone portfolio into different space of online business catering to the different section of customers.

Recruitment –

  • is the flagship brand and is the largest online job portal of India.
  • focuses on the Middle-east market and focuses on entry-level jobs.

Real estate –

  • The online real estate classified industry in India is at a very early stage of growth.
  • 99acres focus on greater customer engagement by using virtual visualization tools, natural language processing and analytics based on rich data set on real estate transactions.
  • Revenue for 99acres comes from 1) Projects: listings, featured listings, microsites, email campaigns and banner advertisements. 2) Resale of properties: listings and featured listings. 3) Rental properties: listing and featured listings.

Matrimonial –

  • In the matrimonial space, offers its customer various services such as listing, searching, expressing interest and accepting others expression of interest.
  • Marriage matching is a highly fragmented market in India, as per the New York Times about 1500 sites are offering this service in India.

Education –

  • provides useful information on careers, exams, colleges and courses which helps the students to decide undergraduate and post-graduate options.
  • The business generates its revenue from branding and advertising solutions for college and universities and through lead generations.
  • Educational institutions and foreign universities are big spenders on print media. The business is focusing its strategy by substituting this advertisement investment from print media to digital media by creating differentiated content like Q&A with community, experts and campus representative and building a strong mobile app.

The Company has widened its scope of business through strategically investing in brands that have been conceptualized and developed by separate entities, to increase its presence across the online business landscape of the country. From time to time, the Company has made investments in early-stage startups and businesses to achieve sustainable inorganic growth.

COVID-19 Impact

  • COVID-19 had led to a nationwide lockdown and had a major impact on the economy resulting in the Q1FY21 GDP registering the sharpest fall in 40 years at -23.9%.
  • The pandemic further had a major impact on the job market, resulting in ~41 lakh jobs lost in India as per a joint report by the International Labor Organization (ILO) and Asian Development Bank (ADB).
  • Info Edge was also not immune to this and has posted a YoY revenue growth of 10.3% at Rs.3.23 billion in Q4FY20, the lowest in last 12 quarters.
  • The recruitment revenue increased by 11.2% YoY in Q4FY20 as compared to 18.4% YoY in Q4FY19, 99acres grew 3.7% YoY as compared to 45.8% YoY in Q4FY19 and Jeevansathi grew 25.4% YoY as compared to 6.5% YoY in Q4FY19.
  • Concerning online traffic share, 99acres saw a drop of 80% and Naukri saw a drop of 60-70% in the first month of lockdown, whereas being a digital product Jeevansathi’s traffic share was not affected. However, Naukri and 99acres bounced back in June but is still running 15-20% lower than last year.
  • Due to delay in admission, education portal, Shiksha saw a reduction in revenue from advertisement.

Differentiating Strategies

  1. Diversification through Acquisitions
    Along with a successful standalone portfolio, Info Edge has diversified through several strategic investments and acquisitions by a mix of equity and convertible loans designed to incorporate multiple rounds of investment based on growth potential. With a flair for entrepreneurship, the Company has made investments in early-stage companies/startup ventures to tap into the growing and vibrant Indian internet market.
    The Company has invested in Zomato Media Pvt Ltd., Etechaces Marketing and Consulting Pvt Ltd., Happily Unmarried Marketing Pvt Ltd., NoPaperForms Solutions Private Limited, International Educational Gateway Private Limited, Agstack Technologies Private Limited, Bizcrum Infotech Private Limited, Medcords Healthcare Solutions Private Limited, Printo Document Services Private Limited, Shop Kirana E Trading Private Limited, Greytip Software Private Limited, Metis Eduventures Private Limited (Adda_24*7), Terralytics Analysis Private Limited (Teal), LQ Global Services Private Limited, Llama Logisol Private Limited (Shipsy), Sunrise Mentors Private Limited (Coding Ninja), Qyuki Digital Media Private Limited, Dotpe Private Limited, Intellihealth Solution Pvt Ltd, Fanbuff Esports India Pvt Limited and Rusk Media Pvt Limited.
  1. Market Leadership
    2 ( and out of 4 standalone portfolios of Info Edge are the market leaders in their respective space. With the superior market position, Naukri had a traffic share of above 90% throughout FY20 and 99acres was able to maintain overall traffic share in excess of 40% during the same period. While the online matrimonial space being highly competitive, Jeevansaathi is one of the top three principal players in India.
    Moreover, Info Edge’s investee company Zomato is the largest online restaurant search and food delivery platform and Policybazaar is India’s biggest online insurance comparison platform.
  1. Innovation
    Innovation and coming up with new and upgraded products are the key to survive in online business space. Info Edge India use Artificial Intelligence (AI) and Machine Learning (ML) to understand consumer behaviour and to provide them with better and improved service.
  1. Marketing Strategy
    Info Edge spends a significant amount on marketing to increase brand awareness among customers. The Company spent Rs.1,756.93 million in FY19 as compared to 1,163.69 million in FY18, reflecting a growth of 50.98%. This marketing spends has helped the Company to create a stronger brand name and acquire new customers. As we see that the Company has maintained its Advertisement and Promotion spend around 13-14% of sales for most of the period FY10-20.

SWOT Analysis


  • Strong Cash Reserves: Since a lot of portfolio companies of Info Edge are in the early stages of development, there is a high cash requirement for brand building, customer acquisition, innovation and other marketing activities. Even with low external funding, the Company has a cash reserve of Rs.15.7 billion as of Q4FY20.
  • Market Leadership: The portfolio companies of Info Edge are the market leaders in their respective space and have the potential to maintain market leadership as well.
  • Brand Recognition: With superior market positioning and strong marketing activity, the Company has created a strong brand recognition for its portfolio companies, viz.,,,,,, etc.
  • Technology: Being a multi-brand online classified company, technological development is the key for growth and survival, hence with a large User Interface (UI) and User Experience (UX) division and a well-established business analytics team, the Company is focused to develop more user-friendly products with the help of technology, product design, artificial intelligence, machine learning and data science.
  • War-Chest: Naukri being the Company’s flagship brand has helped the Company to build a strong cash reserve. A portion of this reserve is maintained as internal ‘war-chest’ and is used to invest in other developing brands as well as technology-based startups, that have the potential to give capital gains to its shareholders.
  • Physical Presence: The Company has a network of 62 offices in 43 cities across India. It also employs 4,049 sales, servicing and client-facing staff. This network is playing a critical role in the growth and expansion of the Company in rural and semi-rural cities.


  • Cash loss: Info Edge’s Matrimony and Real Estate businesses are experiencing losses due to increased expenses. As the nature of the business, these increased expenses were required for innovation and marketing activity.
  • Dependency Risk: Info Edge is heavily dependent on its Naukri business for its profit and cash flow requirement. However, the Company is diversifying into other business to de-risk. Other business now contributes to almost 28.45% of its standalone profit.


  • Increased internet penetration: With government focus on ‘Digital India’ program and other factors like low-cost data, cheaper smartphones and increasing digital literacy, internet penetration in India has increased further. As per DataReportal’s Digital 2020 report, there is an overall internet penetration of 50% in the country. Although India boasts the large number of active internet users, the penetration is still low, considering its large population.
  • Increase Private Equity (PE) and Venture Capital (VC) Funding: Info Edge invests in the technology-based startup business with high growth potential. Indian startup space is continuously growing with over $25 billion PE/VC fund investment in the last 5 years.


  • Technology Obsolescence: Being a technology-driven company there is always a risk of new technology development or innovation that can make the Company’s technology outdated.
  • Competition: A healthy competition is always a threat to any business. Info Edge has been facing competition from online as well as offline businesses. Naukri’s major competitors are Indeed and Shine, 99acres faces competition from various online and offline brokers and Jeevansathi is operating in a space with 1500 websites providing similar services.
  • Government Regulation: Ant Financial acquired a 23% stake in Zomato – an investee company of Info Edge – on November 2018. Due to Indo-China border tension and anti-china sentiment and due to change in FDI norms by government, there is a risk of delay in a further round of investment or the Zomato getting banned.

Michael Porter’s 5 Force-Analysis

Barriers to Entry

  • The barrier to entry is between medium to low as website development requires a significant amount of investment towards marketing, advertisement and R&D.
  • Creating a brand name is difficult because of the highly competitive market and the presence of well-positioned market leaders.

Bargaining Power of Suppliers

  • Due to multiple suppliers who can list their requirements on the website, there is limited bargaining power of individual suppliers. However, since suppliers have the option to list their requirements on other websites, it gives them some bargaining power. They, therefore, have a low to moderate bargaining power. These requirements for the suppliers include access to the resume database of Naukri, job listings by them, employer branding and alike.
  • With respect to 99acres, InfoEdge earns through the listings they showcase on their websites, featured listings, banner ad, and Email campaigns. Here suppliers have the bargaining power only to switch to some other website. They do not have much bargaining power regarding other things. Thus, they have low bargaining power.

Bargaining Power of Buyers

  • Due to the nature of dot com business, the switching cost of the customers is low, that makes the bargaining power of customers high.
  • A small increase in price can make the customer switch from one website to another or from one app to another as the customer does not have to bear any cost (apart from data chargers) to download another app.
  • Because of the highly competitive market, customers are present with a lot of website and applications offering similar service, sometimes with a cheaper cost.

Rivalry among Competitors

  • Info Edge faces intense competition in the various spaces in which it operates.
  • But the Company has created a brand value for itself with its superior marketing activities and established most of its businesses as market leaders in their respective segments.
  • The Company’s investee companies Zomato, whose closet competitor is Swiggy is doing great and is the world’s largest website offering restaurant search and food delivery, whereas Policybazaar is the country’s biggest insurance comparison website.

Threat to Substitutes

  • Despite being a market leader, there is always a big threat of substitute in the online space due to the low switching cost.
  • LinkedIn is a ‘professional social media’ that offers an alternative platform for job seekers and hiring managers to meet and is the major competitor to Naukri.
  • Swiggy being the closest competitor to Zomato offers similar services. A lot of customers compare the prices on Zomato and Swiggi before placing an order.
  • As the customer is always looking for new and updated things, a new player entering the market with improved technology and updated features as compared to Info Edge’s portfolio companies can prove to be a serious threat and throw the respective websites out of business.

Branding and Other Initiatives

  1. Green Initiatives
    Intending to reduce paper consumption and carbon footprint, the Company has adopted the practice to enable to the electronic delivery of notice/document/annual report to its shareholder and also has decided to stop printing an annual report of its subsidiary company along with the Company’s annual report. However, the same will be available on the Company’s website.
  2. Social Initiatives
    For FY19, the Company has allocated Rs.57.16 million for Corporate Social Responsibilities (CSR) to achieve a balance of economic, environmental and social imperatives. The Company is also working with Trust for Retailers & Retail Associates of India (TRRAIN) intending to train persons with disabilities and provide them with employment opportunities in the retail industry.
  3. Focus on education
    Info Edge is working with various foundations to support education for underprivileged children, waste picking children, underprivileged children with special needs, poorest of the poor section of society and help in infrastructure development for the education of children with or without a disability.
    The Company has contributed to Swami Sivanand Memorial Institute, which runs a program named ‘Imparting Quality Education through Compute and Language Development’ which aims to build learning solution for children using technology to complement classroom-based learning.

Financial Analysis

  1. Segmental Analysis
    Info Edge operates as a classified online business with standalone portfolio companies operating in Recruitment, Real Estate and Others segment.
  • Recruitment space is built around, and which provides online recruitment solution to job seekers and candidates. During FY19, Recruitment Solutions grew by 17.51% from Rs.6,687.52 million in FY18 to Rs.7,858.49 million in FY19 and PAT grew by 14.70% from 3,660.28 million in FY18 to 4,198.29 in FY19.
  • Real estate space is built around which generates its revenue from property listing, builder and broker branding visibility through microsites, home page links and banners, servicing real estate developers, builders and brokers. During FY19, real estate business grew by 41.74% from Rs.1,354.33 million in FY18 to Rs.1,919.64 million in FY19 and PAT improved from -360.18 million in FY18 to -275.88 million in FY19.
  • Other business comprised of and, where Jeevansathi generates its revenue when the customer pays to exchange phone number and other VAS and from branding and advertisement solution for college and universities where both Indian and foreign entities advertise. The combined business grew by 8.21% from 1,113.06 million in FY18 to 1,204.43 million in FY19, where grew by 5.24% and grew by 13.01% and combined PAT decreased from -247.84 million FY18 to -363.78 in FY19.
  1. Profitability
    The consolidated EBITDA margin of Info Edge looks stable. The Company has always posted positive double-digit figures. In the initial years between FY10-15, the profit declined due to excessive marketing expenditure for customer acquisition. But from FY17-20, one can see the growth in profitability with only a slight decline in FY20, due to COVID-19. However, the Net profit Margin has been extremely fluctuating and tells quite a different story. On a standalone basis, the Company has a good profit but due to some exceptional items, the consolidated profits have been fluctuating.
  1. Debt
    Being a classified business company, with a business model of investing in the startup, Info Edge is always in high liquidity needs with high cash requirement. The Company manages this cash requirement from its flagship brand Naukri’s cash flows without external funding needs, making it an almost debt-free Company.
  1. RoCE
    Return on Capital Employed is the ratio to measure the Company’s profitability with respect to Capital Employed. It can be seen that the Company has positive RoCE but as discussed earlier, the fluctuation is due to profit and losses from the exceptional items and the Joint Venture/Associate companies. Also, the profits of the investee companies are adjusted in equity, thus causing a fluctuation in employed capital. Hence, RoCE has been volatile over the years.

Risk Analysis

  1. Data Security: For a company operating in the online business, the risk of technological failure and breakdown of the server that could lead to interruption of Company’s website and corruption of all data and/or security breach is significant. The Company has created a secondary website as a precautionary measure or disaster recovery to tackle this situation.
  2. Privacy Risk: Any change in privacy law may affect the Company’s ability to share personal data on its website. However, the Company takes prior consent from its customers therefore minimizing its exposure to this risk.
  3. Content Liability: Most of the portal relies on the information provided by the users. Hence there is always a risk of fraudulent posting and false profile creation which might damage the reputation of the Company.
  4. Obsolescence Risk: There is always a risk of new technology development and/or innovation which can make the Company’s technology redundant.
  5. Legal risk: The Company has some income tax and service tax cases against it, if lost it can have a significant impact on the Company’s future cash flows.

Corporate Governance

  1. The Board of Info Edge consists of 11 Directors, which includes 3 executive directors, 7 independent directors (including two women director) and one non-executive director.
  2. The chairman of the board is a Non-Executive, Non-Promoter director.
  3. During FY20, the board of director met 7 times and independent director met twice.
  4. During FY20, the had seven committees, Audit Committee, Stakeholders’ Relationship Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee, Business Responsibility Reporting Committee and Committee of Executive Directors.
  5. The Audit Committee is composed of 4 independent directors.

The EndNote

  1. Info Edge is in a strong position as most of its portfolio companies are strategically placed as market leaders catering to a different segment of customers maintaining diversification.
  2. The Company’s flagship business Naukri is the revenue generator, fulfilling the Company’s capital requirement without external funding.
  3. The Company has strong management and is under experienced leadership.
  4. The Company has successfully invested in profitable investee companies with good potential for growth.
  5. The Company has a decent spend on marketing and innovation activities required for customer acquisition.
  6. The Company has a strong liquidity position that is enough to sustain its operations for 2.5 years.

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Contributor: Team Leveraged Growth
Co-Contributor: Shanawaz Khan
Research Desk | Leveraged Growth