Shares of Info Edge Ltd. are in focus on Friday, October 9, as brokerages remained positive on the stock despite the decline seen on Thursday after its business update for the second quarter.
JPMorgan has an “overweight” rating on Info Edge, while Citi has a “buy” recommendation on the stock and they see an upside potential of up to 27% on the stock.
Why Is JPMorgan “Overweight” On Info Edge?
JPMorgan has an “overweight” rating on Info Edge, with a target price of ₹1,500 per share. This indicates an upside of 26% from its previous close.
It said the company’s overall billings grew 13% from last year, led by strong growth in 99 Acres of 21%, while Naukri rose 13%.
Naukri’s growth adjusted for client timing delays was 14% to 15%, similar to the first quarter adjusted growth of 15% that was in-line with the brokerage’s estimate.
JPMorgan said Naukri billings growth continues to be driven by premiumization as the share of new offerings such as AI-Rex and Talent pulse is increasing with new client additions in addition to price increases.
Tailwinds from premium hiring and newer monetizable value-added services are here to stay, it said, adding that this should keep billings growth in the 15% range for the financial year 2027.
Info Edge’s core business still trades at 17 times its earnings to EBITDA on a two-year forward basis, which, according to JPMorgan, offers great value.
Citi Remains Bullish On Info Edge
Citi too has a “buy” recommendation on Info Edge with a target price of ₹1,510 per share. This implies a 26.9% upside from its previous closing price.
Citi said Info Edge’s recruitment billings growth can be volatile on a quarterly basis due to the timing of customer renewals, with some customers renewing ahead of schedule, while others deferring it to subsequent quarters.
Adjusting for these timing-related effects, the management noted the underlying billings growth at 14%-15% in the second quarter from last year compared to reported growth of 12.6%.
Citi expects a 13.6% growth in recruitment revenues in the September quarter from last year. It also expects 80 basis points sequential improvement in overall EBITDA margins to 44.8% in the second quarter with EBITDA growth at 28% from last year to ₹280 crore.
Nomura says “buy” Info Edge
Nomura also has a “buy” rating on Info Edge with a price target of ₹1,480. The firm said that Naukri billings were in-line with their expectations while 99acres grew more than what they had anticipated.
20 out of the 22 analysts having coverage on Info Edge have a “buy” rating on the stock, while the other two have a “hold” rating.
Info Edge shares ended the previous session 2.9% down at ₹1,189.6 apiece. The stock has declined 6.1% in the past month and 11.3% this year, so far.