- Q3FY26 revenue holds steady while recruitment billings jump 11% despite global headwinds.
- EBITDA margin beats estimates by 100bps, pushing the multiple to a historic low of 18x forward EV/EBITDA.
- JobHai expansion and Naukri AI REX’s 100‑plus client list position Info Edge at the forefront of AI‑enabled hiring.
- 99acres traffic climbs to 46% of the market, and matchmaking nears break‑even with 31% YoY billing growth.
- Stock correction from US‑India tension fears creates a valuation gap—ICICI upgrades to BUY with a INR 1,530 target.
Most investors missed the fine print in Info Edge’s latest earnings, and that cost them a buying opportunity.
Why Info Edge’s Margin Upswing Beats Sector Expectations
Info Edge’s EBITDA margin posted a 100‑basis‑point uplift versus analyst consensus, nudging the company into the rarefied 18x forward EV/EBITDA zone—roughly 2.5 standard deviations below its 10‑year average. In a sector where margins typically compress during macro slowdowns, this resilience stems from three levers:
- Premium Tech/IT Placements: High‑skill roles command superior fees, buffering against volume declines.
- Growth in GCC and B2C Segments: International hiring pipelines and direct‑to‑candidate offerings diversify revenue streams.
- AI‑Powered Tools: Naukri AI REX’s agentic AI reduces recruiter labor costs while boosting placement efficiency.
These drivers not only lift profitability but also raise the ceiling for future scaling.
Sector Trends: AI Disruption and Real‑Estate Listings in India
The Indian recruitment market is at a crossroads. AI‑driven sourcing and matching are shifting the economics from volume‑based billing to value‑added services. Companies that embed AI into their core workflow, like Info Edge, can achieve near‑break‑even on matchmaking—a milestone that still eludes peers such as Monster India and Indeed India, which continue to rely heavily on ad‑driven models.
Simultaneously, the online real‑estate segment is consolidating. 99acres now commands 46% of traffic, up from 44% in the prior quarter, signaling a winner‑takes‑most dynamic. This traffic advantage translates into higher listing fees and cross‑selling opportunities for Info Edge’s ancillary services, such as mortgage leads and property analytics.
Competitor Landscape: How Tata and Adani‑Backed Platforms React
While Tata’s digital ventures (e.g., Tata Neu) have yet to launch a dedicated recruitment arm, they are eyeing the AI talent pool as part of broader talent‑acquisition strategies. Adani’s foray into digital classifieds via Adani Classifieds is still nascent, focusing on regional markets with limited AI integration.
By contrast, Info Edge’s early AI rollout gives it a first‑mover edge. Competitors are now scrambling to partner with AI startups or build in‑house capabilities, a process that typically takes 12‑18 months—time during which Info Edge can lock in market share and pricing power.
Historical Context: Past Earnings Corrections and Recovery Patterns
Looking back at the 2018‑19 earnings dip caused by US‑India tariff anxieties, Info Edge’s stock fell ~22% on sentiment alone. Within 9 months, the company rebounded, delivering a 15% earnings CAGR and lifting its EV/EBITDA multiple back to 22x.
The current correction mirrors that pattern: macro‑driven fear (US‑India ties, AI uncertainty) pushes the price down, while fundamentals remain solid. History suggests that disciplined investors who buy at the low‑multiple trough capture the bulk of the upside during the subsequent recovery phase.
Key Definitions: EV/EBITDA and Agentic AI Explained
EV/EBITDA: Enterprise Value divided by Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures a company’s total valuation relative to its cash‑flow generation, stripping out financing and accounting differences.
Agentic AI: Advanced artificial intelligence that can autonomously perform tasks—here, sourcing candidates, screening resumes, and recommending matches without human intervention, thereby lowering recruitment costs.
Investor Playbook: Bull vs. Bear Cases
Bull Case: The 18x forward EV/EBITDA multiple represents a deep discount to historical averages. Continued AI adoption drives margin expansion to 30%+ within two years. Real‑estate traffic growth fuels higher listing revenues, and JobHai’s city‑wide rollout adds 5‑7% top‑line growth annually. Target price of INR 1,530 implies ~30% upside from current levels.
Bear Case: If AI fails to deliver expected efficiency gains, recruitment fees could compress, dragging margins back to 22%‑24% range. Regulatory scrutiny on data privacy could increase compliance costs. A prolonged US‑India geopolitical strain might dampen cross‑border hiring, eroding the GCC tailwinds.
Overall, the upside potential outweighs the risks for investors with a medium‑to‑long‑term horizon.