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Info Edge (India) Ltd
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Good evening, everyone. We'll begin the call in a minute as people are joining, and it takes a while for people to join. I'm Anand Bansal, and along with my colleague, Vivek, we'll be conducting this call. We'll begin in a short while. We have 110 people with us. We'll wait for a minute. I now request Vivek to start the call.
Thanks, Anand. Hi, everyone. This is Vivek, and I'm the moderator for the call today. Good evening, and welcome to the Info India Limited Q2 Results Conference Call. [Operator Instructions] Please note that this conference is being recorded. Joining us today from the management side, we have Mr. Sanjeev Bikhchandani, Founder and Vice Chairman; Mr. Hitesh Oberoi, Co-Promoter and Managing Director; and Mr. Chintan Thakkar, Chief Financial Officer. Before we begin today, I would like to remind you that some of the statements made in today's conference call may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to Slide #2 of the investor presentation for a detailed disclaimer. Now I would like to hand over the conference to Mr. Hitesh Oberoi for his opening remarks. Thanks, and over to you, Hitesh.
Thank you, Vivek. Good evening, everyone, and welcome to our second quarter FY 2021 results conference call. As always, we will first start with the overall financials and then cover each business in more detail. And then, of course, we'll have time for Q&A. The audited financial statements file and other schedules on segmental billing revenues, et cetera, along with the data sheet, have been uploaded on our website, infoedge.in. Firstly, talking about the stand-alone financials. Billings in Q2 were INR 249.5 crores, down 17% year-on-year. Revenue in Q2 was INR 256.1 crores, down 19.1% year-on-year. Operating expenses, excluding depreciation, for the quarter were INR 204.6 crores, down 5.9% year-on-year. Operating EBITDA stood at INR 51.6 crores versus INR 99.3 crores last year, a reduction of 48.1% year-on-year. And operating EBITDA margins for the quarter stood at 20.1% compared to 31.4% in Q2 of '19/'20. EBITDA readjusted for ESOP noncash charges stood at INR 58.1 crores versus INR 104.8 crores in Q2 of last year. And EBITDA margin readjusted for ESOPs for the quarter stood at 22.7% versus 33.1% in Q2 of last year. Cash EBITDA for the quarter stood at INR 45.7 crores, down 44.5% year-on-year. And deferred sales revenue stood at INR 371.9 crores as of September 30, 2020, versus INR 480.7 crores as of September 30, 2019, a decline of 22% -- 22.6% year-on-year. The cash balance in IEIL and all of its -- and its 100% subsidiaries stands at INR 3,373 crores as of September 30, 2020. This was INR 1,509 crores on September 30, 2019. Key sort of highlights of the quarter. In Naukri, traffic has returned to pre-COVID levels. JobSpeak Index, which is a proxy for hiring activity in the country, is rising month-on-month. In September-October, it was down 23% compared to last year. This was a significant improvement over what we saw in Q1 when the index was down 60% on the average. Some sectors, such as travel and hospitality, are yet to recover, and that is reflecting in the index. In 99acres also, we saw traffic returning back to pre-COVID levels, although builders are still exercising caution over their advertising spends. Brokers have slowly upped their spending on resale and rental segments. Due to a decrease in new launch activity and biased preference for ready-to-move homes, the new home segment continues to remain a little muted. We continue to remain aggressive in Jeevansathi. Our aggressive investments there have helped us grow faster than our competitors, both in terms of traffic and in terms of billing. And of course, we continue to invest in areas of strategic interest and adjacencies. Moving on to the consolidated financial highlights. At the consolidated level, the net sales for the total company stood at INR 260.9 crores versus INR 329.5 crores from last year. For the consolidated entity at the PAT level, there is a gain of INR 328 crores versus a loss of INR 111.8 crores from the corresponding quarter of last year. Adjusted for the exceptional items, PAT stood at INR -- stood at a loss of INR 46 crores in quarter ended September '20 versus a loss of INR 113.4 crores in the corresponding quarter of last year. Moving on to business-wise results. We'll first discuss recruitment. In Q2, recruitment billings were INR 167.3 crores, down 20.2% year-on-year, while revenues were at INR 182.6 crores, a degrowth of 19.3% year-on-year. Operating EBITDA stood at INR 100.5 crores, down by 18.9% from September of '19. Margins were at 55% versus 54.7% in Q2 of last year. EBITDA readjusted for ESOP noncash charges stood at INR 103.6 crores at 56.7% versus 55.9% in Q2 of last year. And cash EBITDA for recruitment during the quarter stood at INR 85.4 crores, down 20% year-on-year. In Naukri, in Q2, we witnessed a good recovery -- a solid recovery, in fact, in collections. From a 48% decline in Q1, we were -- collections in the corporate sales part of the business were down 13% in Q2, with September collection down only 10% year-on-year. The current recovery is experienced across all industries. In Q2, the Billing and IT and Telecom service in September comprised our largest revenue base has reached -- comprising our largest revenue base has reached pre-COVID levels. Continuous monthly improvement in direct online sales is also suggesting a revival in our sales from retail and small customers. The job seeker activity in the platform continues to recover since June. And we -- on an average, we added 16,528 new CVs per day in Q2. And the Naukri database grew to 71 million CVs. Average CV mods were also at about 451,000 per day in Q2. Recruiter engagement on the platform has also been recovering -- also recovered in Q2 though recruiter searches are still down 12% in September and 13% for Q2. The recovery is being driven primarily by the IT and ITeS segment. Our traffic share in the job portal space continues to be in the 90s with nearest competition coming from Indeed. Iimjobs reported a billing of INR 5.17 crores for Q2 of 2021. This is a growth of 11.6% [ this also ] operated at a breakeven level during the quarter. Moving on to the real estate vertical. In 99acres, billings in Q2 stood at INR 46.7 crores, a degrowth of 22.9% year-on-year, while revenue stood at INR 36.3 crores, a degrowth of 36.3% from INR 57 crores in Q2 of '20. Operating loss for the quarter stood at INR 7.2 crores. EBITDA adjusted for ESOP stood at a loss of INR 5.8 crores versus a profit INR 5.2 crores last year in the same quarter. And cash profit for 99acres during the quarter stood at INR 2.9 crores against a cash profit of INR 6.8 crores last year. In 99acres, in Q2, business improved subsequentially each month from July to September, recovering to 76% of last year Q2. We exited the quarter on a much stronger momentum than we started -- than where we started the quarter. While all business verticals of new home, resale, rental and commercial continue to be impacted in Q2, new homes was impacted more with lesser launches -- lesser new launches than last year and a shift in buyer's preferences -- preference for more ready-to-move-in properties. The number of clients billed, the average billing and average billing per customer both impacted in Q2. On the average, smaller cities' business recovered more than the larger metros. We reduced our ad spend on facilities and marketing. And by the end of Q2 of daily listings posted by owners were higher than pre-COVID levels while broker listings were recovering with some lag. Traffic on 99acres had fully recovered in Q2. By the end of Q2, traffic had started growing by 10% compared to pre-COVID Feb '20 levels. Inquiries or responses through the platform grew in a strong manner in both new homes and resale. The brand or top-of-the-mind sort of share versus our nearest competitor slightly inched up to 59% in Q2 as per Google search trends. Moving on to Jeevansathi. In Jeevansathi, billings grew 18.6% year-on-year in Q2 to INR 24.7 crores and revenue grew 14.4% year-on-year to INR 23.8 crores. The operating EBITDA loss for the business stood at INR 33.3 crores in Q2 of FY '21, up from INR 16.5 crores last year. EBITDA readjusted for ESOP stood at a loss of INR 32.9 crores for Q2 versus a loss of INR 16.3 crores last year. Cash loss of Jeevansathi during the quarter stood at INR 32.7 crores. In Q2, Jeevansathi saw further acceleration in profile growth rates and higher traffic on the platform. Aggressive marketing spends resulted in reaching pre-COVID levels of sales growth. Some of the features like video calling, video profiles and video-based online meet-ups continue to help the business drive growth in user engagement in the quarter. Improved payment experience across platforms also helped improve realizations. We continue to consolidate our position as we penetrate deeper into our core markets. We plan to spend aggressively more on -- considerably more on marketing across all markets to strengthen our brand presence going forward. Moving on to the Shiksha business. In Q2, billings in Shiksha grew 15.2% year-on-year to INR 10.8 crores while revenue grew 7.7% year-on-year to INR 13.4 crores. EBITDA stood -- for Shiksha stood at INR 0.9 crores versus a profit of INR 0.2 crores in Q2 of last year. EBITDA readjusted for ESOP for the quarter stood at INR 1.4 crores versus a profit of INR 0.6 crores last year. Cash loss for the quarter stood at INR 1.7 crores. We are continuously putting more efforts to get more and more user-generated content on the website so that we can drive more leads to our customers. Finally, our strategic investments. Zomato -- talking about Zomato, the company is witnessing the revival of business in food delivery. Both revenues and volumes are trending towards pre-COVID levels. The management is thriving on its journey towards profitability, and the unit economics still remain encouraging. Policybazaar has registered growth in its core businesses. That has helped in term insurance. This growth rate is higher than the industry growth in these 2 segments. Paisabazaar is also witnessing a revival its operations, and we expect significant recovery for the business in the second half of this year. Besides this, we continue to explore investment and acquisition opportunities in areas of strategic interest and adjacencies. These investments would be continued to be made through our balance sheet or the IEIL venture fund. Thank you. This is all from us today, and we are now ready to take any questions that you may have.
Thanks, Hitesh. We will now begin the Q&A session. [Operator Instructions] Anand, you will start the questions now?
The first question is from Sachin Hemnani.
I have a few questions, listing them together.
Sachin, sorry, can you introduce yourself first, please? Sachin Hemnani from where?
From Perfect Research.
From?
Perfect Research.
Perfect Research. Okay. Thank you.
I have a few questions, listing them together. Number one, as per your latest presentation, Indeed seems to have lost some market share on [ based off ] traffic share. So are we gaining the market share from the other players like Indeed, et cetera? Number second, on 99acres, Magicbricks seems to have gained some market share since March '19 and our lead over them has reduced. So could you please throw some light on it? Next, with the growing number of online education players, what strategies are we taking to grow Shiksha? And the last one, also regarding our investment in Coding Ninja. Now WhiteHat Jr acquired by Byju's, how is the competitive intensity shaping up for Coding Ninja? That's all.
Okay. See, Indeed, we already have a very large share in the market. The movement in market share over the last few months, is because of COVID, of course, we've -- we lost traffic in the first few months. But competition was impacted even more, and therefore, we ended up gaining a couple of points in terms of market share over Indeed. But I would not read too much into it. So -- since you already had a very large share of the market, it doesn't say move the needle for us. Yes, but we sort of did a better job than Indeed, at least in terms of share last quarter or in the last 6 months. 99acres I would not read too much into these independent sort of sources which give out share because a lot of these algorithms keep changing from quarter-to-quarter, right? The problem really is that the app traffic is not so easy to measure and so that complicates a lot of things now because a lot of the traffic is on the app. So unlike a few years ago, when a lot of the traffic was on the web, a lot of our in-transit customers now sort of use the app. And that is not so easy to measure for these -- a lot of these online sort of traffic sort of and data providers. We may have lost a couple of points to Magicbricks over the last few months. It may also -- see, but normally, when these 2 or 3 points or swings which you see are often a result of advertising spend in that particular quarter. So in a quarter, if Magicbricks spends more we may end up losing a few points. On the other hand, when we spend more, we may end up gaining a few points. So I would not read too much into these things at this point in time. Your third question was around sort of -- sorry, what was your third question?
Shiksha strategy.
Byju, Whitehat Jr, Coding Ninja.
Shiksha strategy and then fourth one is on Coding Ninja.
Okay. Shiksha, we continue to invest in sort of more content and that is what's really driving traffic to our platform. So we started as a site which listed our colleges and courses. Now we have a lot of information, exams. There's a lot of other education content which we have on our platform as well. We have hundreds of thousands of reviews on these collegial across platform. So really, our strategy in Shiksha is to provide more and more relevant content to our audiences, okay? And we believe that if you do a good job is then we get more traffic. And as a result, we can then generate more inquiries for our customers who pay us for these inquiries. So Coding Ninja and scheme of things. Their model is a little different from WhiteHat Jr. They sort of [ limited the investment ] than they were basically trying to teach [ name the course ]. While Coding Ninja -- while, sorry, WhiteHat and others are sort of targeted, they basically trying to teach students and kids in school. So Coding Ninja, the proposition is that they want to help sort of upskill jobseekers and then help them get better jobs, right, over time because of the upskilling we sort of provide to them. So -- and it's very, very early for them. And this is the model they are sort of working on right now. So they're very different from WhiteHat and Byju's and the others.
The next question is from Vivekanand Subbaraman from AMBIT Capital.
I have 2 questions. One is, we are seeing that the usage metrics, whether it's jobseeker activity or say, recruiter searches, they are gradually coming back on track as far as Naukri is concerned, and same is the case with 99acres. So Hitesh, just wanted your views on how long will it take for our monetization to follow, given that we are still quite some distance away from the peak billing that we saw both in recruitment and realty, right? We are down 36% versus 4Q FY '19 and recruitment 30% down versus 99acres. Second question is on the monetization of the new traffic that you are getting on 99acres. You said that we now have owner listings at an all-time high and brokers are also spending more time on the portal. So how do we build out these new revenue streams? Because if I understand correctly, new launches used to be the dominant portion of our revenue in 99acres.
Yes. So you're absolutely right. Activity is coming back. We saw jobseeker activity come back about 3 months back. And now [ searches are increasing, seems to be some ]. And I think then you see it's only a matter of time before we start -- before revenue catches up. We -- our billings in Q2 were about 80% of last year. But in September, we did 90% of what we did in September of last year, right? So on the COVID front [ then it's only a matter of time before we get ] normal levels. We should not compare to Q4 because Q4 is seasonally a very strong quarter for us, right? And a lot of businesses are due for -- subscriptions are due for renewal in Q4. Of course, what COVID has also done is it's sort of resulted in a shift. A lot of businesses who did not renew in Q4 of last year or Q1 of this year may actually end up buying in Q3 and Q4 of this year. So let's see how that plays out. So some of the business we are getting actually is business from customers who did not renew when they were due for renewal in the last few quarters. So that's -- and the same thing is happening in 99acres. Again, a lot of -- there, of course, the renewal part of the business is smaller in size compared to Naukri because we sell a lot of monthly and quarterly campaigns as well. But even there, a lot of our clients did not renew in Q1, especially brokers that are new customers and now some of them are coming back. Traffic is also back in 99acres. In fact, the response on the site is actually at an all-time high. The number of inquiries we are generating are like 50%, 60% in -- on the buyer side over last year. So let's see how that plays out. But you -- and to answer your second question, see there, again, you're absolutely right. See what we are seeing is a shift in interest from buyers. So instead of new homes, many of them are looking for deals in the ready-to-move-in market, right? And therefore, interest or inquiries have shifted to that segment, which has resulted in our new launch revenue coming under pressure. And so new homes which are almost ready to move in are still sort of in demand. But new launches for homes will be ready 3 years from now, 4 years from now, that sort of response has gone down. And that's impacting revenue. But my sense is that even on that front things are now beginning to improve. We are now seeing even new home inquiries go up a little bit. And it's only a matter of time before that revenue also -- and if the situation continues to get better on the COVID front, I think it's only a matter of time before that revenue also comes back on track.
Right. Just one small follow-up on the Naukri answer. So historically, we've grown via a mix of new customer acquisition and also greater usage by our existing customers. So when I look at the unique customers that we reported, we are still down around 20-odd percent as far as the unique customers are concerned. So by when do you expect that we get back to the unique customer level that we had pre-COVID and potentially then acquire new clients also?
So that will take a few more quarters in my view to play out because, see, a lot of customers have gone out of business, a lot of companies have shut down shop. A lot of companies have scaled down operations and many of them do not buy or renew in the last 2 or 3 quarters. We are slowly getting some of them back, right? But, I think, it will take a while before our numbers start hitting the kind of numbers we were getting earlier.
The next question is from Ashish Agrawal from Principal AMC.
Sir, just wanted to understand the increase in the advertising cost. Was this primarily driven by Jeevansathi and 99acres business? And just wanted to understand on the Naukri side. You indicated a lot of that growth is being driven by IT, ITeS business. I wanted to understand, apart from IT, ITeS, have you seen a growth in other segments also? I think you highlighted Travel segment remains stressed. But apart from Travel, have you started to see growth in other segments also?
So travel and hospitality and retailing, these segments are very stressing. We've not gotten back to pre-COVID levels or in fact, we're down maybe 40%, 50%, 60% from where we were a year ago in terms of activity on our platform from recruiters. In IT, we are getting close to base. So IT companies -- activity from IT companies is now almost at the same level as it was pre-COVID. Some other sectors are doing well. Sectors like health care and education and telecom and insurance. So these sectors are still okay, but they're still down vis-a-vis where they were pre-COVID. So that's the sort of lay of the land and the recruitment side. Now of course, things are getting better with every passing week, and we don't know, but -- and if the situation of the COVID front continues to improve, hopefully, more and more sort of sectors will come back to normal levels. Anecdotally, what we're also hearing from companies is that attrition rates are going up everywhere, right? So that's something we are seeing, or companies are telling us. So let's see how this plays out. So that -- sorry, what was your first question?
This was on the advertising cost look like just to understand [ was it driven by Jeevansathi and 99acres business ]?
That's mostly on account of Jeevansathi. That's mostly on account Jeevansathi.
So Jeevansathi investment you said [ will cut back the... ][Technical Difficulty]
The next question is from Vijit Jain from Citi.
I have 2 questions. One is on the Naukri business. Now if we look at the commentary from the major IT companies in India, a lot of them have announced to be hikes for employees and looks like recruitment is going to be strong in the next year or so in that segment. So I know you mentioned that IT, ITeS is almost close to base, but do you think it will meaningfully exceed pre-COVID levels in the near future in the next 1, 2 quarters? What kind of momentum are you seeing there? Is my first question. And my second question is on 99acres. With activity in players like nobroker.com, which are adding more services on top of the classifieds in the real estate space, do you think there is opportunity for 99acres in adding new services which can be monetized as well? And your thoughts on what you're going to do on that?
Yes. Regarding your first question on IT hiring, see, it's difficult for me to say what's going to happen going forward. What I can tell you is that activity on our platform from IT companies is going up. It's not -- it's still where it was a few months ago, still not hit pre-COVID levels, just about there. It's not as if we are hiring much more than what they were hiring earlier, at least on our platform. Very difficult for me to say what is going to happen in the next few months. I guess to some extent, it will depend on what happens in the U.S. and how that sort of scene plays out. As far as nobroker and the other sort of players in the real estate, the real estate sector is a very large sector. We are basically a real estate -- 99acres basically is a real estate search and classified and research kind of company. We focus primarily on the buy side. A very small proportion of our revenue comes from rental and even smaller portion of our revenue comes from commercial. What nobroker is doing, I guess, is they sort of -- one, they are a different model. They're not just a classified. They're actually an end-to-end sort of transaction platform in some sense. They provide all kinds of services to their users. They don't allow other brokers to list on their platform, for example. So they are in some ways [ different ], right? There may nobroker, but they provide all the services the broker provides. And of course, we're also trying to get into other areas like society management and so on and so forth. So our focus in the near-term is going to continue to be on improving the search and classified experience for our users on our platform in 99acres. Of course, we may sort of provide a lot more information to them over time to help them take a decision, to help them sort of understand that real estate market better, to help them understand what's the lay of the land and so on and so forth. So we will provide a lot more research information in the near term. We may -- we already provide some owner asset services to owners. So if owners want to list their properties in 99acres, we help them sell their properties. We have them rent their properties on 99acres. We have a team which is sort of -- but we don't do the [ business transaction ]. We just sort of help them a little bit, which is why it is called assisted services, not transaction services. Do we have any plans to provide more services in the near term? Not in the near term, but definitely not ruled out in the medium term.
[Operator Instructions] Vivekanand Subbaraman from AMBIT Capital.
So pressing a bit on the recruitment piece, you mentioned about certain sectors that are doing well. Also, could you talk a little bit about the growth that we are seeing, especially in the Jobspeak index in small towns? I mean the Tier 2 cities seem to be holding up much better than big cities like Mumbai, Delhi. So is there any plan to increase the sales infrastructure or distribution infrastructure in these towns so that we can capitalize on the opportunity in these small towns? And the same question is applicable for realty also. Hitesh, you mentioned this in the opening remarks that smaller towns seem to be doing much better than the large cities. So I guess it's a common question on whether you want to invest in creating additional infrastructure on the ground in small cities?
Yes. So smaller towns have actually, on the whole, performed a lot better than large cities with COVID, maybe because there have been kind of fewer cases of COVID in these small towns compared to cities like Bombay, Pune, Delhi, Bangalore, which were locked down for a very long period of time. And in 99acres, we've seen a surge in even buyer activity in small towns, not just listings. Unfortunately, for us, today, at least, and they are a very small part of our total revenue, both in 99acres and in Naukri. And we -- actually, we've been in these -- many of these small towns for a very long time now. So Naukri has offices and sales offices in over 40 cities, 99acres has offices in over 40 cities. So it's not as if we don't cover these small towns. We've been there for a long time. They're growing, but they're growing off a very low base, right? So even if you continue to grow like this for a year or 2, they will not really move the needle for us in any significant way in both Naukri and 99acres. And of course, we will continue. So we don't mind going to 100 cities, 200 cities. We go wherever there is business. So that's not a problem. But it's just that there's not enough business in these small towns still. They're growing, but off a very low base.
Right. And I can understand that it would be the case in recruitment because, I guess, the white-collar recruitment activity and of course, business activity would be much higher in the top cities. But why is that the case in real estate? Is it so that the sales velocity is much lower in small towns? And is it because also a lot of construction happens by people on their own rather than sale of property by builders?
So, you're absolutely right in saying that the real estate market is a broader market. The real estate is bottom sold in maybe 200 cities, 300 cities, 500 cities. It's broadly sold everywhere unlike white-collar job activity, which is actually restricted to maybe 20, 30, 40 cities in this country. So we are cognizant of that. And we do believe that in the long run, 99acres will be 100, 200, 300 cities. It's just that today, the number of transactions which take place in small towns is still very low on a monthly basis. Real estate market has actually shrunk over the last few years. And even in places like Bombay and Delhi, we've seen a massive drop in real estate transactions. Values are also lower. Housing values are also lower in small towns. So while you can -- in Bombay, an average house is maybe INR 1 crore or INR 2 crore. In a small town, you can get a house for INR 20 lakhs, INR 30 lakhs very easily. So therefore, it's just that the size of the market is much, much smaller. That's all. So maybe this will change over the next few years. But right now, the number of brokers in small towns, the number of transactions, the number of houses bought and sold is just tiny compared to some of the bigger cities. Together, they add up to a significant number. Maybe if you add all the traffic we get from all the small towns in the country, maybe you're still to 25%, 30%, 40% of all 99acres traffic. But from a revenue standpoint, they are still very, very tiny.
Right. And last question is on Jeevansathi. So what is going right for you here? And if you could help us understand whether the growth is driven by volume? Or is it that your brand has now become strong, helping you take increases in tariffs or reduce the discounts? And secondly, in terms of the overall market, what would our share be of the total transactions that happen volume-wise and value-wise? Do you have any sense on that?
See, we've gained some share in this market over the last 3, 4 years because we're investing very aggressively in marketing and branding. We've been growing at 15%, 20% per annum, in fact, for the last [ 3 or 4 ] years now while on the other hand, [ where we don't invest, we've been ] growing [ at maybe under ] 10% per annum over the last few years. So we've gained share and share [ and most of our share gains ] have been [ belt in ] the North and Western parts of the country, which is where we are focused. So we are a strong #2 player now in the North and West, more volume than value growth. We want more and more activity on our platform. We want more handshakes to happen on our platform. That's been our sort of focus. And therefore, on the one hand, we dropped our marketing expenditure. On the other hand, we dropped [ pricing ]. And that's been the case for the last few years now. In terms of share, nationally, our share is still very small. We are still maybe -- the market is about -- we are maybe about a 15% of the market. But that's because we don't really have any presence in the South, which is a very large part of the overall market. In the Hindi belt, you must be -- probably have a 35% share of the market. In the North and West together, we may probably have a 25%, 27%, 28% share of the market. So yes, and -- so that's what we continue to do. We're continuing to sort of penetrate deeper and deeper into the heartland and trying to gain share.
Next question is from Saurav Garg from KPMG.
I just had 1 quick question. Could you give us a sense of how much of your marketing spend is being spent on Jeevansathi alone?
So last quarter, our marketing spend on Jeevansathi was about INR 43 crores, I think.
Got it. And could you give us a sense of how much of your -- what is the paid profile growth and free profile growth in Jeevansathi?
I think you have to refer to our data sheet. Whatever in question, it is in our data sheet. We don't reveal everything. So I can't give you all the numbers, but whatever we use in our data sheet, which is on infoedge.in. Just take a look at that.
Next question is from Anmol Garg from Motilal Oswal.
So just wanted to get some sense that are we planning to increase our advertisement expense into Jeevansathi? And also, are we planning to increase any kind of planning to do any kind of advertising in 99acres as well?
So Jeevansathi ad spend, we're already up substantially over the -- compared to Q1, we spent a lot more in Q2. We'll continue to be aggressive in Q3 as well. I can't give you the exact number in even Jeevansathi in the foreseeable future. The market has also become a lot more competitive. Our competition is also spending a lot more than they were spending earlier. So we really have no choice. And so that's Jeevansathi. In 99acres, wait and watch. We have upped our ad spend slightly over last quarter in Q3 while we are waiting to see how the market evolves. If the market activity increases in real estate business, then of course, will be forced to [ drop ] our ad spend as well.
Okay, sir. Secondly, Hitesh, I just wanted to get any -- some outlook on some of the new initiatives within the recruitment portal that you have started off like BigShyft? And is there any potential in the blue-collar job market?
See, these are the start-ups [ start-up customer, which means we are experimenting and ][Technical Difficulty]BigShyft, still very, very tiny. We have a few customers now, and we are getting some sort of revenue, but still very, [ very tiny ]. Blue collar, we are test marketing [ and as in BigShyft, ] we are making good progress. We've got some traction. We're [ contracting ]. We will expand here. So these are sort of long -term or the blue-collar job to contribute to revenue in the near term.
Okay. Sure. And just lastly, just for bookkeeping. Can you repeat the EBITDA Shiksha? I missed that.
Shiksha, EBITDA. Vivek, do you have it with you? Can you just give it out?
Yes, it was in -- yes, it was INR 90 lakhs for the quarter.
Next question is from Alankar Garude from Macquarie.
My first question is, can you comment about the M&A activity in each of our 4 key verticals so for example, there was a deal a couple of weeks back for one of our real estate peers. So are there any acquisition opportunities which are likely to come out about for us over the next few quarters, in any of these 4 verticals?
The quantity evaluating companies, in the last quarter alone, we must have looked at about 5 or 6 sort of deals which have come out of [ that ]. We've said no to most of them. I can't comment on the deals. But we have a team in-house, and we are continuously looking for opportunities to both invest in start-ups and also acquire companies, in all the verticals we operate in. So -- I mean so far, we haven't. But yes, are we talking to lots of companies? Are we evaluating lots of companies? Yes, we are.
Okay. And Hitesh, when you say 5, 6 deals, so that would be across these 4 verticals only [ the ] verticals or any of our the start-up -- includes the start-ups as well?
No, no, no start-ups that's a separate activity. That's through the Info Edge sort of venture fund [ and yes ], that's separate. They probably look at hundreds of companies every quarter. I'm referring to the spaces we're already in.
Next question is from Aditya Badami from Carrhae Capital.
I just wanted to mention about -- talk about Zomato. So Sanjeev last quarter mentioned that so that half the restaurants may not survive through this year because of COVID. And today, you mentioned that Zomato's unit economics are improving. So I just want to know, is it being driven by better revenue or has their cost rationalization improved?
No, no, no. I don't think I could have said half the restaurants will not survive. I probably said it is possible that half of the restaurants that are still shut may not survive.
Yes. Yes.
So look, some restaurants closed down, right? Exact number, I do not know. The delivery part of the business is growing well. It's not yet come back to pre-COVID levels, but it should come back to pre-COVID levels pretty soon. And this year, talking about revenue for Zomato and not GMV and not volume, correct? Zomato unit economics have changed since COVID. They are charging the recharge, they're giving lower discounts. Therefore, their revenue per order has gone up and the average order value has also gone up as a consequence, right? So therefore, on revenue, they are back to pre -- almost back to pre-COVID levels in a couple of months [ which we exceeded ].
Next question is from Utkarsh Solapurwala from Damos Capital.
First one is on Ustraa. Marico recently acquired Beardo in July 2020.
I can't hear your question, please. Can you come close to the mic?
Marico recently acquired Beardo, and Beardo is the competitor for Ustraa. And when I compare the financials, Beardo is growing much better as compared to Ustraa. So will Ustraa be able to compete with Beardo once Marico integrates the business in its business and starts to grow the Beardo business?
Well, look, obviously, Marico is a large company, and they have muscle in their distribution and all that. And therefore, today it's a significant competitor. But Ustraa also sells direct to consumers, right? Ustraa has raised money from IIFL, we've announced that, right? Beardo sells to a salon chains, a large part of their output. Now of course, Marico could extend it to consumers. So it's a slightly different strategy, and it's not a many different market. So as long as Ustraa achieve its goals and numbers, we think it's all right.
And second question is on ShopKirana. So companies are trying up different logistic methods to reach out customers during the lockdown. So how has been the performance of ShopKirana in last 6 months?
So ShopKirana exceeded pre-COVID levels within 2, 3 months of the lockdown because it's an essential item. I think it was an initiative of physical disruption because every vans would not go out, but at last 15, 20 days of. After that, they were able to manage. So it's doing rather well in the cities that it's operating. And they've also launched their own house brands in a couple of categories, which are also getting some traction. So look, ShopKirana is doing well, but it's still doing experiments with its own house brands with a few tweaks of business models here and there. So let's see what happens.
Vijit, you want to discuss again, Vijit Jain from Citi.
Yes. Sir, I had 2 questions, one on Zomato. I think you answered it partly. But I was just curious, when you say unit economics are improving, do you believe that they would be able to achieve similar GMV levels as pre-COVID in the next year with these kinds of unit economics that they have? Or is it [ indecisive ]?
Pre-COVID revenue levels I said on the food delivery part, which is a bigger part and which is a substantial part. It should be back in a month or 2.
And my second question was among the other list -- among the other investments you guys have, just wanted to know your thoughts on categories like you have a few in B2B, e-commerce. You have a few software [ and such... ]
B2B, e-commerce, what do you mean, which investment?
ShoeKonnect would be B2B?
Correct. So again, ShoeKonnect is doing rather well because has got investment from 2 other marquee investors. We've participated along with the other investor. So I think that company is showing great traction, great growth and has now got access to great capital, and it's back to pre-COVID levels.
On. So my question actually was over -- as a category, you have 3 or 4 of these, right, you have Gramophone, ShoeKonnect and you also have...
Gramophone is not B2B. Gramophone is B2C unless [ you're thinking of Parliament I think of business, which is quite possible to say actually ].
My question was among these broader categories, right? Okay, if I just simplify that further to e-commerce, B2B or B2C, wherever you are present and some of the Software as a Service businesses that you are present in. Just wondering what your thoughts are on how these things have shaped up post-COVID? How the landscape for these businesses have changed post-COVID?
So we don't bother so much about the landscape and the environment as we bother about the performance of our companies, each specific company. And I'm quite pleased to say that almost all of our companies have coped quite well with the COVID crisis. Whether it's whether it's Shipsy, whether Gramophone, whether it's Bijnis or ShoeKonnect, whether it is ShopKirana, whether it's a [ -- multiple ones ], they have all coped very well with COVID, which was actually something we were quite worried about in the first month or 2. I think the management teams are really good. We -- actually we invested behind some -- we are fortunate to have invested in some really [ rough ones. ] And 1 or 2 of them have got COVID also and have recovered. So it's not just a company, even they have coped with COVID.
Anmol Garg from Motilal Oswal, do you want to discuss again?
No, I think all my questions are answered.
The next question is from Sudheer Guntupalli.
Hitesh, as you alluded to in one of your earlier comments, attrition rates across the industry seem to be inching up gradually and multiple industries have also been talking about bottlenecks in terms of availability of the talent or manpower. So in the equation, demand actually seems to be there but still there is a huge gap in our monetizability on a year-on-year basis or even compared to pre-COVID levels. So do you think maybe relooking at our pricing or marketing strategy in the Naukri segment, at least for a limited period of time may help us in bridging the gap and monetizability?
See, we -- our product team is continuously sort of looking at ways and means to sort of get more traffic, improve our monetization on the platform. What we don't want to do is -- what we don't want to -- see, this is a difficult time for our customers. We want to be as supportive as possible. What we are trying to, of course, do is create more value for them. And if you create more value, I'm sure they'll be happy to pay us more. That's what our focus will be going forward.
Sure. And secondly on Jeevansathi, looks like we had run multiple flash sales during the quarter, offering up to 70%, 80% discounts on the subscription packages. So just trying to understand the rationale here. Matrimony looks like a segment which anyways is witnessing some shift from physical to digital in the current COVID context. So just curious on how you see the sustainability of this, let's say, aggressive pricing or marketing strategy, especially given the fact the churn of the customers in the segment is relatively higher?
So this is something we've been doing for the last 2, 3 years. It's not just us now. Everybody else is also doing the same thing, whether it's Shaadi or Matrimony. We sort of -- of course, started doing it because we wanted more and more paid customers on our platform. We wanted them to spend. We were a #3 player in the market, right? So in some ways, we were a challenger. And this was our strategy to get more and more people to use us and to become paid customers and -- because many of these customers would have otherwise gone and paid competition because we were a weak player at that time. So -- and this worked for us. We were able to grow our volumes by over 200%, 300% over the last 2 or 3 years and that's got the platform to a certain level. Is it sustainable in the long run? Clearly, a 3-player market where players are competing aggressively with each other on customer acquisition and also trying to outdo each other on pricing is not sustainable for a very long time. But that's what it is right now.
Utkarsh from Damos Capital. Do you want to discuss again, Utkarsh?
No, all my questions have been answered.
Okay. Your hand was raised, actually. Okay. Next question is from Jaipal Reddy. He is an Individual Investor.
I have 2 questions actually. The first question is about from our investor companies, right now, we see Zomato and Policybazaar are a very big and what is the next -- the good call that we have taken, which is a margin that we can count on in the next few years -- few quarters?
Sorry, could you repeat that question? Your voice was soft?
Yes. So right now from our investing companies, we see Zomato and Policybazaar are made out to be a very good calls. And what is the next one we can count on to be our...
Look, the others are much earlier, much smaller, but many of them have received external validation by external investments from marquee investors. So Ustraa has got investment from Wipro consumer, it's got investment from IIFL. Likewise, business which is ShoeKonnect has got investment from 2 marquee investors apart from other external investor. And Gramophone has got enough inbound interest. Nothing announced yet. So very better. Shipsy has got, again, nothing announced yet but I would say moderate interest. So a lot of validation or getting validation in the process of. And it will be announced by and by as these companies raise money. But yes, if it would become as valuable as Policybazaar or Zomato will take some time. Listen, there are 5 or 6, which we are hopeful of and now we hope all of them make it at that level. We know that we'll be very fortunate if one of them make it. But even if 2, 3 of them make it to that level, I think we are doing very well, but it will take time.
Okay. I understood, yes. So the next question is about there is a lot of uncertainty right now in the market, right, in terms of a lot of people got -- a lot of small business players were suffering from a lot of losses. So what is our CSR activity that we're doing from last 6 months? Do we change any -- change in our CSR activity without -- at the end of the day, we also [ were saved by ]. Did you do any investments and contribution to our society?
Yes, we have. And I'll leave it to Chintan to talk about it. Chintan, are you going to talk about it or Murali are you? But we have reoriented at least a significant chunk of our CSR budget. We have had employee contributions towards this, and we're managing those projects. We are funding several projects that reduce CSR. Now this is a corporate level. At a personal level, also, the founders, the management is also doing philanthropy to support people in times of COVID. And Zomato has done a lot. Zomato has launched a Feeding India Program where they're feeding -- where they fed a large number of people during lockdown. Chintan, you want to talk about what we've done?
Yes. No, I think that's correct. I just add the one point, and yes, we are continuing to support the organizations, which we are in the past we were not supporting because there is a kind of a sort expectations. Those organizations also kind of are dependent in some ways, on our contribution. So we have continued that. We have not done [ a lot of that yet ], but we have generated additional funds from the company, from the employees and we have also focused on very specific initiatives around COVID helping them out. So we are far more holistic in our approach. We are adding [ nominal ] our contribution to COVID medical sites, but we are continuing to support the existing contributions as well.
Next question is from [ Puja Ahuja ].
I just have 1 question with Zomato. Do you comment on maybe next year? Do we intend to [ add some more as we ] hold on to [ onward ] taking the company?
Look, we are not in any hurry to sort of sell anything. We have the ability to stay on for a long, long time because we are not running out of fund where we have to return somebody else's money. At the current period of time, we see substantial value creation going forward. Having said that, look, we will -- never say never, but there is no pressure on us to sell. Let me just elaborate on that. You see the challenge in India is that early-stage investments take a long time to create value. So you've got to be patient because strategic sales are not happening in a hurry at valuation that will give [ BC ] investor any [ joy ] if you leave out Flipkart, right? That was a black swan, right? Now IPOs take a long time to happen, right? So if Zomato and Policybazaar IPO in the next 2 years or 3 years or next year even, you've taken 11 and 13 years to have gone from inception to IPO or first round to IPO, right? Most [ BC ]funds are 8-year fund with [ year ] extension. So really to get exits, you have to be very patient. We have been in Zomato for 10 years. We have been in Policybazaar for 12 years, and a lot of the value creation has happened in the last 2 years. [ Had competitor exited ] and not benefit on valuation. So we have to be -- to really make money in India, you have to be very, very patient and stay for a long, long time and that's fine.
Next question is from Swapnil from JM Financial.
So my question is regarding the employee cost. So just like [ some other ] are we -- if we have started hiring again and have the [ business ] which were postponed been taken and your comment on the incentives as well.
Yes. So we started replacing people in a lot of businesses. In some parts of the company, like new businesses are like [ Job A ] and [ BigShyft ], we are hiring a few people as well. We had put salary increases on hold for the first 6 months. We are revisiting right now as we speak. We have put bonuses on hold. We are likely to sort of roll out bonuses in this quarter to our employees for last year. But I think normally we will do do sort of more of these things.
And are the incentives back on because I think incentives are different from bonuses, right?
Yes. So incentives are -- see, our sales team is on incentives, and we have a monthly incentive plan and a quarterly plan. So they were never withdrawn. So it's just that the payout sort of reduced because the sales guys were not able to meet their targets in the first quarter and in the last quarter of last year. But Q2, we had a reasonable quarter. So many sales guys made their incentives. So incentive payout also increased substantially in Q2. And I'm hoping that people meet their targets and therefore, earn their incentives going forward as well.
Next question is from Dheeresh.
So for September, Naukri, you said billing -- collection billing was down 10%. For October, what is it?
So normally, we don't give out quarter numbers before -- I mean -- so let me put this way, the things are sort of [ this quarter also right now in... ][Technical Difficulty]
Sorry, Hiteshji you are not audible.
Hitesh, we can't hear you.
Can you hear me now?
You want to switch...
Can you hear me now? Because I can hear you...
Much better. Much better.
So the October is the first month of the quarter, the first month of the quarter is not a very large month for us. A lot of our renewals are due at quarter-end, and that's when we end up collecting a lot of money. Also, last year Diwali was in October. This year Diwali is in November. So the numbers are not strictly comparable, but we are happy with what we saw in October.
Is it better than September? Because it will be like-to-like, right? October versus last year October, right?
Yes. Like I said, it's not strictly comparable because Diwali was in October last year, this year November, right? So hard to draw sort of inferences from it.
And for real estate, you did not give September collection exit rate?
We are -- we did not, but I'm sure it is higher than the quarter average for sure. Even October was a reasonably good month for real estate. But again, it's not strictly comparable because Diwali was in October last year, this year it's in November.
And this new home construction activity, which you said, because of the customer preference is down right now, how much does that contribute in a pre-COVID environment? How much was it contributing to revenue?
So the new homes are a very large part of our business. But within new homes, there is a category called new launches, right? New launches are launched basically projects which are launched. They are sort of -- I mean, construction is like about to start, right? And therefore, the project will become available to live in, maybe all the property will become available to live in 3 or 4 years later. So a significant proportion of new home revenue comes from new launches and new launches have actually been impacted the most over the last few months.
Yes. But that is like what? Was it like 30% of total 99acres revenue, 40%, how much was it? Just a range...
New home revenue is significant. New home as a whole is significant about, I think, 60% of our total revenue, if not more, 60%, 65%. Of that, new launches, I don't have the exact number right now, but would be maybe 30%, 40%.
Okay. And what is the total cash now on the...
On the balance sheet? Okay, Vivek, you have the number with you? INR 3,300-something crores, in that range.
Yes, INR 3,323 crores.
And at the time of the QIP, it was sounding as if some M&A transaction is very nearby. So has that phase gone for whatever reason it is, has it gone away and now nothing is immediately on the table just like that?
No. So like I said earlier, we keep talking to companies, and we've been talking to some companies for a very long time, some companies have recently come on the table. Sometimes we don't like what they see, sometimes they don't like what we offer. So what is -- so we keep talking, and we've been talking to companies in the matrimonial space, we've been talking to companies in the real estate space. We've been talking to companies in the education space, job space, in all the sectors we are in and even related sectors. But nothing has materialized till now. I mean, for a deal to happen, 2 parties have to agree and that's not happened till now, unfortunately.
Next question is from Aatman Ajmera.
So a bit of a big picture question from my side and slightly linked to the previous question. So given your size and the liquidity on the balance sheet are often seen as the one to be consolidating as a consolidator of the industry, be it real estate or matrimony. My question is, do you see a scenario where perhaps Magicbricks and Housing sort of merge together? A, do you think that is a likely event? And B, what is the consequence for 99acres if that were to happen? Can you sort of combat a merged Housing and Magicbricks?
Yes, see, everything is possible. I mean, Housing is a #3 player in the market. They could merge with Magicbricks, though, I think, what has happened there is REA has upped their stake significantly, and they now are majority owners of Housing. So can we compete with the Magicbricks, Housing sort of combination? Of course, we can. I mean, see, there was -- in the past, also see we've had Common Floor, we've had India Property, we've had a bunch of other players in the market. Our sense is that unless and until the merged company sort of brings a strong sort of value in some form to the table, either they are -- if they are strong in some market and you are strong in some other market, and therefore, the combination is stronger, then it's a different ballgame or if they have something which you don't have, some technology, some products, some customer base, so mergers create value. But if it's just the #1 company or a #2 company acquiring #3 company, often -- at least we believe that those mergers don't create a lot of value.
But in the previous examples, you mentioned they were fragments, right? I mean they were sub-sub 10% traffic share. #2 and #3 is sort of have in the 20s, right? So so even they might not have sort of synergies or sort is just the mere traffic? Is that a big deterrent sort of for you?
We don't think so because we believe it is -- it makes much more sense to invest in sort of -- unless they are complementary, like I said, in different brands, and they sort of operate in different segments or different markets. In my view, it makes a lot more sense to strengthen one brand and strengthen the user experience of that brand than have a multi-brand strategy.
[ Puja Ahuja ] had raised hand again. [ Puja ] you want to discuss again? Are you there, [ Puja ]? Next question is from Sagar Lele.
Could you just explain on Zomato and Policybazaar IPO timelines? And second question is, could you explain on the Info Edge venture side, what is the fund strategy and what sort of deals are you looking at what sectors?
[ We think -- ] go ahead, Hitesh.
No, no. What is the first question?
The IPO timeline.
Yes, why don't you hand the IPO question?
Yes. So look, I know that are news reports around Policybazaar as well as Zomato intending to do IPO. And yes, that's true in a sense that companies have been preparing themselves, right? To do an IPO, there is -- it's a kind of a long journey, and you need to really prepare yourself. So from the point where you are just a start-up to the point where you kind of make your company ready for IPO, it's quite an along journey. And they are -- both the companies are preparing themselves for that journey. They are making their companies ready for it. So there isn't definitely intention behind it. When will it happen? I think that's a question that it's a little premature to respond to that. We'll see. Right now, the focus is on making the company ready for an IPO so that if we finally decide and if we finally say that, yes, everything is right for us to do IPOs we will go ahead with that. Right now, it's just about preparing the company for IPO.
So the strategy for the employed ventures, it's the same as earlier. We are focusing on the same areas, we are growing in the same [ state ] of companies. Nothing changes. It's just that we have housed it in [ AR. ]
So that was the last question we had. In case of any more question, we may wait for some time. So there are no more questions. Please go ahead.
So on behalf of Info Edge India Limited, we conclude this conference. Thank you, and wishing you and your family a very Happy Diwali, and you may now disconnect the call. Thank you.
Thank you, guys. Happy Diwali.
Thank you. Happy Diwali.
Thank you.