Info Edge reported consolidated revenue of ₹1,004.07 crore in Q1 FY26, representing approximately 11% year-over-year growth . But that single number masks two very different stories playing out inside the company. The recruitment business, led by Naukri, grew revenue by just 5%, while 99acres, the real estate classifieds platform, delivered 12% revenue growth . This isn't just a difference in performance—it's a window into two distinct markets with very different demand dynamics.
Naukri's 5% revenue growth (with 9% billings growth) reflects the challenging recruitment environment. Geopolitical headwinds and sectoral slowdowns, particularly towards the end of the quarter, led to contract deferrals by some clients during the peak closure period. The impact wasn't uniform across sectors. GCCs, technology companies, retail, healthcare, and manufacturing posted double-digit growth, but recruitment consultants, IT services, BPM, BFSI, and infrastructure experienced moderation with growth tapering to low single digits. Despite these challenges, Naukri's operating profit margin remained robust at 52.5%, generating ₹284 crore in operating profit. Transcripts +3
In contrast, 99acres demonstrated stronger momentum with 12% revenue growth (17% billings growth), driven by increased billed customers and higher average billing per customer. The platform now hosts over 1 million total listings, with live new project listings growing 17% YoY and live resale and rental listings from brokers growing 29% YoY. This growth came despite Q1 being typically the smallest quarter from a billing standpoint for 99acres. The real estate market has improved significantly compared to previous years when it faced challenges from demonetization, RERA, GST, and the NBFC crisis. Transcripts +2
Here's where the math gets interesting. Despite only 11% revenue growth, Info Edge achieved substantial margin expansion through disciplined expense management. Total expenses grew 14.6% YoY, while revenue grew 20.9% (consolidated), creating significant operating leverage . The EBITDA margin expanded to 46.7% from 43.7% in the previous year, and the PAT margin improved to 34.1% from 31.2% .
Employee costs demonstrated notable optimization. Employee costs as a percentage of revenue decreased from 41.25% in FY24 to 40.75% in FY25, despite the employee count increasing to 6,065 as of March 31, 2025. This reflects improved workforce productivity and better operational leverage. The company also maintained strategic cost control through flexible marketing investment, AI-driven efficiency initiatives, and selective investment strategies focusing on high-growth adjacent businesses while maintaining discipline in core operations. AnnualReports +2
The recruitment business demonstrated exceptional operating leverage characteristics. Revenue from operations in the recruitment business grew by 15% to ₹542 crore, outpacing the 9% billing growth, demonstrating positive operating leverage. Meanwhile, non-recruitment businesses contributed to margin expansion through improved efficiency—18% billings growth with reduced cash losses, Jeevansathi achieving break-even at operating level with 36% billings growth, and Shiksha delivering operating profit of ₹6 crore. Transcripts +2
A clarification is necessary here. The available data shows consolidated PAT of ₹342.86 crore in Q1 FY26 (32.4% YoY growth), not the ₹490 crore with 43% growth mentioned in some scenarios . Similarly, references to a ₹72 crore one-time loss causing profit to fall to ₹246 crore could not be verified in available data. The company actually reported a gain of ₹7.64 crore on fair valuation of non-current investments in Q1 FY26, not a loss. InvestorPresentations +1
However, Info Edge does have a documented history of significant exceptional items that create substantial earnings volatility. In Q4 FY25, the company reported a multi-fold year-on-year increase in consolidated net profit to ₹463.3 crore, aided by an exceptional gain of ₹25.5 crore. In contrast, Q4 FY24 saw net profit of only ₹60.3 crore with an exceptional loss item of ₹161.9 crore. This represents a 668% YoY difference primarily due to exceptional items.
The frequency and magnitude of these one-time items suggest that Info Edge has significant exposure to non-operating financial volatility. The company's profitability remains highly sensitive to exceptional items and startup investment valuations, including publicly traded investments like Zomato and PB Fintech. This creates a disconnect between operational performance and reported profits, making it essential for investors to look beyond headline profit figures and focus on core operating metrics for accurate performance assessment.
Info Edge employs markedly different capital allocation strategies for its two primary segments, reflecting their distinct market positions and growth stages. For Naukri, the company adopts a disciplined, performance-based approach. Management indicated that "if growth slows down, we may stay at the same level as last year". The core Naukri business can operate effectively with a performance marketing spend of ₹30-40 crores annually, with additional investments directed toward newer verticals like JobHai, IIMJobs, and Hirist. Transcripts +1
In contrast, the company maintains an "open checkbook" philosophy for 99acres: "In 99acres and in Jeevansathi, there's no limit. We can go to any extent. If you get good returns and if you think we are gaining share and it will help us in the long run. We look at marketing as an investment in these verticals". Management has increased ad spending significantly over recent quarters because "our marketing campaigns have been working well and we're delivering well for the platform". The company is willing to accept extended losses to build market position, stating "if that requires us to invest a lot more in the business, and if that means taking a loss of some more time, that's fine with us". Transcripts +2
The recruitment platform faces a "very modest hiring market" where "it's not as if companies are sort of under pressure to hire quickly. They are taking their time". LinkedIn remains the primary competitor, particularly for senior-level hiring and passive job seekers, though "Naukri is reasonably strong" in the ₹20-50 lakh salary segment. The competitive intensity has remained stable, with "LinkedIn and us continue to be the two big players". Management believes Naukri can "grow more than 20% year on year" when the recruitment market recovers. Transcripts +3
The real estate classifieds market remains "very competitive. There are a lot of players out there and they're all spending money", with Google and Facebook capturing significant advertising dollars from developers. Despite competitive pressure, 99acres has strengthened its position, becoming traffic leaders across "almost every big city". The company aspires to grow 99acres at "more than 25% per annum" with a clear path to profitability. Management indicated that "if all goes well, 99Acres on a cash basis will get close to breakeven" and with high-teens growth, "it should make some money". Transcripts +3
Which segment demonstrates stronger scalability? 99acres shows stronger near-term scalability potential due to higher growth targets (25%+ vs 20%+), smaller base with significant market share gains, structural real estate market tailwinds, and earlier stage in monetization curve. However, Naukri offers more sustainable long-term scalability with its dominant market position with pricing power, AI-driven efficiency improvements, B2C monetization opportunities, and proven profitability model.
The differential growth rates between the segments are influenced by distinct market conditions: Naukri faces a modest hiring market with LinkedIn competition, while 99acres operates in a rapidly growing real estate market with intense but manageable competition. With ₹4,828 crore cash balance as of June 30, 2025, Info Edge has substantial financial flexibility to sustain investments across both platforms while navigating their respective competitive landscapes. Transcripts
Management emphasized that "in the end, it's market share, which matters the most, that's what gives you the durability of returns". This philosophy explains the aggressive investment in 99acres despite current losses and the disciplined approach to Naukri despite its dominant position. The company is playing two different games simultaneously—defending and optimizing a mature cash cow in recruitment while aggressively building market share in a structurally growing real estate classifieds market. Transcripts
