Shares of Info Edge (India) Ltd., the parent company of flagship online platforms like Naukri.com, rose nearly 3% in early trade on Tuesday, Aug. 11, after drawing mixed reactions from global brokerages following a steady quarterly performance.
Info Edge stock opened at Rs 1,297 against a previous close of Rs 1,282 and extended gains by over 2% to hit an intraday high of Rs 1,326.70 apiece on the NSE. The stock last traded 3.24% higher at Rs 1,323.50 apiece on the NSE. This compares to a drop of 0.14% in the Nifty 50 benchmark.
While both Citi and Bank of America (BofA) have raised their target prices citing improving business momentum and strong monetization prospects, Macquarie remains highly cautious, flagging potential long-term disruptions from artificial intelligence on hiring velocity.
The diverging brokerage notes highlight the crossroads at which digital recruitment portals currently stand. While near-term operational beats, GCC hiring, and pricing power are giving bulls a reason to cheer, the medium-to-long-term threats of AI-driven stagnation in job creation continue to keep cautious analysts on the sidelines.
Here is a breakdown of what the major global brokerages are forecasting for the internet major:
Citi: Bullish on Premiumization and Pricing Power
Rating: Maintain Buy | Target Price: Raised to Rs 1,510 (from Rs 1,400)
Citi analysts are optimistic about Info Edge's growth trajectory, highlighting several accelerants in the company's recruitment billings. In the near term, the brokerage notes that the expansion of Global Capability Centers (GCCs), improved pricing power, and better jobseeker monetization are acting as highly supportive growth pillars.
Looking to the medium term, Citi expects the premiumization of the white-collar jobs market to drive average revenue per user (ARPU)-led growth. For the long term, the brokerage pointed to traction in the company's value segment-specifically its 'JobHai' portal-and the broader macroeconomic environment for Indian and global jobs as key catalysts to watch.
BofA: Steady Q1 Momentum Aided by AI Initiatives
Rating: Maintain Neutral | Target Price: Raised to Rs 1,400 (from Rs 1,330)
Echoing a solid near-term sentiment, BofA noted that Info Edge delivered a steady first quarter, marked by a 5% EBITDA beat compared to street estimates. BofA analysts observed that business momentum is actively improving, and the recent uptick in hiring trends is likely to sustain.
Interestingly, while some fear AI's impact on the job market, BofA highlighted that Info Edge's own newer AI initiatives, combined with its strong footing in the premium recruitment segment, are actively aiding Naukri's operational performance.
Macquarie: AI Disruption Poses Downside Risks
Rating: Maintain Neutral | Target Price: Rs 1,000
In stark contrast, Macquarie retained its 'Neutral' stance with a significantly lower target price, expressing concerns about the underlying mechanics of the company's growth. The brokerage pointed out that recruitment revenue growth is currently trailing behind billings.
More importantly, Macquarie warned of a looming structural threat: the risk of AI actively slowing down the overall velocity of jobs in the market. According to their analysis, this disruption will lead to a softer medium-term outlook for both billings and revenue. Consequently, Macquarie sees a potential downside risk to the broader street consensus, which currently forecasts mid-teen revenue growth for the company.
The diverging brokerage notes highlight the crossroads at which digital recruitment portals currently stand. While near-term operational beats, GCC hiring, and pricing power are giving bulls a reason to cheer, the medium-to-long-term threats of AI-driven stagnation in job creation continue to keep cautious analysts on the sidelines.
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