Info Edge (India) Ltd

NSE:NAUKRI

Earnings Call Transcript 2019-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the Info Edge Limited Q3 FY '18/'19 Results Conference Call. Joining us on the call today are Mr. Hitesh Oberoi, Managing Director and CEO; Mr. Chintan Thakkar, CFO; and Mr. Sanjeev Bikhchandani, Vice Chairman. [Operator Instructions] I now hand the conference over to Mr. Hitesh Oberoi. Thank you, and over to you, sir.

[Hitesh Oberoi, Co]

Thank you. Good evening, everyone, and welcome to our third quarter FY '18/'19 results conference call. We will first take you through the quarterly financial performance of the company. Then, we will cover each business in more detail. And in the end, we'll be happy to take questions. The audited financial statements file has been uploaded on our website, infoedge.in. We've also provided segmental billing, revenue profit before taxes and deferred sales revenue movement in our data sheet on our website. We first discuss the stand-alone financials of the company. Billings in Q3 were INR 272 crores, up 19% year-over-year. Revenue in Q3 was INR 281 crores, up 24% year-on-year. Operating expenses, excluding depreciation for the quarter were INR 197.7 crores, up 33% year-on-year. Operating EBITDA stood at INR 83.3 crores versus INR 78.8 crores last year, an increase of 6% year-on-year. Operating EBITDA margin for the quarter stood at 30% versus 35% in Q3 of last year. EBITDA adjusted for ESOP noncash charges stood at INR 87.8 crores versus INR 82.1 crores last year. And adjusted EBITDA margin for the quarter stood at 31.2%. Cash EBITDA for the quarter stood at INR 78.8 crores, down 5% year-on-year. Deferred sales revenue stood at INR 405 crores, as of December 31, 2018 versus INR 333 crores as of December 31, 2017, a growth of 21.5%, and the cash balance stands at INR 1,868 crores as of December 31, 2018, versus INR 1,878 crores as of September 30, 2018. The recruitment business and real estate business continue to drive the growth for Info Edge in Q3. The focus of investments during the quarter was on marketing as well as hiring and upgrading of product and tech talent in the company. We spent a lot more than last year on marketing in both Jeevansathi and 99acres. These expenses helped us to increase awareness levels of our brands. Moving on to results by segment, we'll first discuss the recruitment segment. In Q3, recruitment segment billings were INR 193.6 crores, up 18.7% year-on-year while revenues were INR 203.7 crores, a growth of 20.5% year-on-year. Operating EBITDA margins in the recruitment segment were at 54.7% versus 57.4% in Q3 of last year. EBITDA margins adjusted for ESOP and noncash charges stood at 55.7%. The majority of incremental spends in Naukri were on technology upgradation, new product development and marketing, and data science. Cash EBITDA for the recruitment segment during the quarter stood at INR 103 crores, up 11% year-on-year. In Naukri, in Q3, FY '19,/'18, we added an average of 12,000 new CVs every day and the Naukri database grew to over 61 million CVs. Our traffic share in the job -- traditional job portal space continue to sort of remain very high in the mid-70s. And we continue to invest aggressively in our recruitment tools and systems business as we added more and more -- and we added more clients for the product. We've also strengthened our customer support and data science teams during the quarter. The growth in billing in Naukri was aided by continued momentum in the IT sector. Recruitment consultants as a segment also sustained their growth from last quarter, and non-IT sectors especially auto, construction, oil and gas and insurance and some other smaller sectors did well for the company in terms of growth as also indicated by our Naukri JobSpeak index. Moving on to the other verticals. In 99acres, billings in Q3 grew 30% year-on-year to INR 49 crores while revenue grew 48% to INR 50.4 crores. We continued to invest aggressively in marketing during the quarter. Business had an EBITDA loss of about INR 3.2 crores versus a loss of INR 7.4 crores at the EBITDA level in Q3 of last year. EBITDA adjusted for ESOP expenses stood at a loss of INR 2.3 crores versus a loss of INR 7 crores last year. EBITDA margins improved from minus 21% to minus 5%. Cash EBITDA loss of 99acres during the quarter stood at INR 3.8 crores. Our traffic share among the real estate portals continued to be around 50% mark based on time spent. We have upped our marketing spend significantly over last year in this quarter. The broker segment continued to see strong growth. Our investment segment -- investment in 99acres will continue as we see the real estate market stabilizing. The key focus of investments in 99acres would include more marketing spend for building brand awareness and investments in tech products and data quality. Moving on to the matrimony business. Billings in Jeevansathi grew 5% year-over-year in Q3 to INR 17.6 crores, owing to continued aggressive pricing and activity by competition. Revenue grew 7% year-on-year to INR 17.7 crores. Higher marketing expense during the quarter aided higher brand awareness for us. We're continuously trying to consolidate our position as we penetrate deeper into the key segments and communities we operate in. Operating EBITDA loss for Jeevansathi stood at INR 15.2 crores in Q3 of FY '19, up from INR 4 crores last year, primarily on account of higher marketing expense. Adjusted EBITDA loss stood at INR 15 crores for Q3 for Jeevansathi versus a loss of INR 3.9 crores last year. Cash EBITDA for Jeevansathi during the quarter stood at about -- stood at a loss of INR 15.1 crores. Moving to the education vertical. In Shiksha, in Q3, billings grew by 12% year-on-year to INR 11.9 crores while revenue grew 25% year-on-year to INR 9.2 crores. We made an EBITDA loss of INR 2.5 crores versus a loss of INR 1.2 crore last year. Adjusted EBITDA loss of the quarter stood at rupees INR 2.1 crore versus INR 1.1 crores last year. Cash EBITDA profit for the quarter stood at INR 55 lakhs versus INR 2.1 crore profit last year. We continue to sort of put in more and more effort to get -- improve the user experience in our platforms. Talking about our strategic investments, Zomato continues to witness massive top line growth in the delivery space. We announced an investment of INR 13.4 crores in ShopKirana, a B2B grocery delivery platform during the quarter. We also did a follow-on round of investing INR 28 crores in our investee company NoPaperForms and INR 3 crores in ShoeKonnect during the quarter and we continue to evaluate new investment opportunities as well. That's all from us. Thank you. And we're now ready to take any questions.

[Operator]

[Operator Instructions] Sir, should we open the questions from the participants in the audio lines?

[Hitesh Oberoi, Co]

Yes.

[Operator]

[Operator Instructions] We have our first question from the line of Sachin Salgaonkar from BOA.

[Sachin Shrikant Salgaonkar, Director]

I have 3 questions. Firstly, clearly, real estate is showing strong growth even on a high base effect so was -- I'm trying to understand what is driving it? And how should we look at it? I heard Hitesh, your comment that you know the broker segment was strong, but any further granularity would be helpful. Second question is ad increase and clearly, we are seeing close to around 97% Y-o-Y increase in ad, it would be great if we could get some granularity as in which subdivision is seeing most of the increase? And thirdly, question on Zomato. Clearly, there has been some activity and then some noise around about Zomato looking to raise investment. Just wanted to understand from you guys, how you look at it?

[Hitesh Oberoi, Co]

Yes, so real estate -- firstly, last year, we had a terrible first half because of RERA, and so in first half this year, we saw close to 45%, 50%, growth but that was on the top of a very low base last year. Things started recovering in Q3 of last year. So this year, again, we've sort of -- we grew our billings by 30% in Q3, revenue growth was much higher. But what we are seeing in real estate is 2 things. One, in general, real estate activity seems to have stabilized and in fact transactions actually have -- have probably gone up in some markets as well. So people are buying more homes than they were buying earlier, but what we're also seeing is a slowdown in new launch activity. So a lot of our revenue comes from new launches, but we are seeing a slowdown on new launches. But at the same time, I think, transactions have stabilized or are growing compared to last year. So that's what we're seeing in the real estate space. Let's see what happens going forward. This market has been very volatile. Every now and then we have something or the other happening in this space.

[Sachin Shrikant Salgaonkar, Director]

Hitesh, this is in mainly north of India or across the board?

[Hitesh Oberoi, Co]

Across the board. Across-the-board. So there is a revival of some sort across-the-board, especially, more in the west and south. But in general, the market is a lot more stable. Anecdotally, in some places the prices have gone up a little bit as well, but I don't have sort of data on that front. As far as the advertising goes, we upped our ad spend in all our businesses, at least, the 3 big business, Naukri, 99acres and Jeevansathi. In Jeevansathi, we sort of spent a lot more on advertising than last year and there's a lot of competitive activity in that space, a lot of pricing pressure, and so we were forced to respond. In 99acres also, sort of -- we've sort of seen a lot more advertising intensity from competition. So we are sort of keeping our spends also high, relatively high. In Naukri also, we've seen -- Naukri, we had cut down on advertising a lot over the years, and I think the time has come to spend a little more money on sort of building the Naukri brand, as we've been sort of very dormant in media. Market is looking up. So we upped the spend on Naukri advertising as well last quarter. So in all 3 businesses, we saw between a 50% to 100% jump in ad spending.

[Sachin Shrikant Salgaonkar, Director]

And this near term trend might continue, right? The ad spending in these subsegments...

[Hitesh Oberoi, Co]

Yes, it's like -- there could be ups and downs and a lot of it, like I said, is determined by also to some extent by what competition sort of does in this space. But yes, I mean, we want to continue to advertise aggressively for some time. On Zomato, I'll let Sanjeev answer that question.

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

Yes, so look, Zomato is going head-to-head with Swiggy, UberEATS is also in the fray as is Foodpanda. So it's become a hugely capital consumptive game. So yes, Zomato is looking to raise money and there is interest from several investors. So -- but right now, it's work in progress, so we can't really comment -- give you more specific detail on that.

[Sachin Shrikant Salgaonkar, Director]

And Sanjeev, on a big picture view, how do you look at it? Maintaining your stake and it's really too early to comment?

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

So look, this has got -- become a game that is slightly -- too big for our balance sheets for us to even retain, maintain our stake right, and if it is very large [ round it will ] mean a very significant outlay on our part. So that will not be our preferred option.

[Operator]

We have next question from the line of Anuj Gupta from Perfect Research.

[Anuj Gupta]

Sir, I have got few questions, I'll just list them down. Under Sanjeev sir, we have made some fantastic investments. So can you please share our efforts on institutionalizing the investment process through an investment committee as we grow in size? Secondly, could you please share some numbers on the potential opportunity in terms of market size for Naukri.com, 99 acres.com and Jeevansathi.com? Thirdly, amongst the investee companies, can you please throw some light on any company, which have shown extremely impressive growth and could become big like Zomato or Policybazaar? And last, in terms of the investee companies, how are we looking at the risk of writing off investment and its impact on the balance sheet? And also, is there any possibility of a writeback of the investments?

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

So I think that's 4 or 5 questions. So look, as far as write-off of investments is concerned, you know, we follow prudent accounting practices and good governance principles, we are conservative. So yes, as and when we feel something is not worth what we've paid for it, we impair it. Naturally, this is done in consultation with the auditors and we'll continue to do that, right? And the truth also is that not every investment succeeds. So it's part of the game, right? These things happen. Now can a written-down investment come back? It's possible, right. But for that, something has to change in the business. So for example, we may have written out Canvera but -- and then merged it with Printo but it's -- if the combined company does very well, who knows it may come back, but we don't know yet, right? So it's possible. But right now, nothing is showing. I can't say for sure something is going to come back. As far as the process for institutionalization of investment is concerned, that already exists. We have a corporate development team, we have a process by which they source deals, they evaluate deals. Once the corporate development team agrees on an investment, it is then taken to the 3 executive directors, right? Once they approve it, it goes to an investment committee of the board and then finally, it gets invested in, right? And that's the process we've been following. Now as far as any new investments are concerned, which may become like Zomato or Policybazaar, it's too early. Nothing has scaled up to that level yet, but obviously, we are hopeful that some will succeed and who knows they might succeed as well as Zomato and Policybazaar, yes. But we can't say anything about that yet. And Hitesh, you want to talk about sales?

[Hitesh Oberoi, Co]

Yes, yes, so as far as the market size is, market opportunity in different verticals go. See, it depends how you define the market. Now for example, the job market, so we operate mostly in the white-collar sort of lateral hiring space, but there is a blue-collar job market as well, there is a white-collar market, there is a market for recruitment tools, there is a market for very senior management hiring, the research business which sort of -- so but given the market that we operate in currently, which is white-collar, maybe 1 to 10 to 15 years of experience hiring in the private sector mostly. So what we sort of believe that we are maybe 25%, 30% of all hiring in this space. So for some companies, maybe they hire 5%, 10% of the people through us, some companies hire 40% of the people through us. A lot of money is spent on recruitment consultants. A lot of money spent on -- still spent on newspaper ads and so on, referral programs that are run by companies. So if you want to take all this into account, maybe it's a market, which is over $1 billion, maybe $1.5 billion, $2 billion, there are no real sort of numbers available out there. As far as -- and this is just white-collar, private sector, lateral hiring. If you, again, the real estate market, again it depends on how you define it, if you look at just advertising, then there is a residential market and there is a commercial market. Within residential, you have new homes and you have resales. We mostly operate in the residential advertising market with -- in both new homes and resale. Now the total advertising spend in this segment is -- a few years ago, actually at its peak, it used to be INR 5,000 crores INR 6,000 crores, but it's declined over time. My estimate is that today we are looking at a market of about INR 3,000 crores, INR 3,500 crores, but I could be off a little bit on this one. And this does not include commercial real estate, right. So that's the addressable market to date probably for just advertising. Matrimony, if you take the 3 matrimony companies, they probably do between them about INR 600 crores to INR 700 crores of revenue and then there are some spend on newspaper ads, and then there are matrimonial agencies and so on and so forth. So maybe another maybe INR 800 crores to INR 1000 crores, that's what the market would be today. And so that's my broad sense but you know really, no market studies are available. These are sort of just estimates from us.

[Anuj Gupta]

And sir, for the last question? Do you see any investee companies sort of -- any investee companies becoming big like Zomato or Policybazaar?

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

Yes, I had addressed that. Look, it's too early to say because many of the companies are still small. Several are showing promise, but it's too early to say whether how far they will go and by when.

[Operator]

We have next question from the line of Manish Adukia from Goldman Sachs.

[Manish Adukia, Equity Analyst]

My first question is just a follow-up, Hitesh, on one of the comments that you made earlier. You said that in Naukri, you feel that now time has come to up your advertisement spend a bit. Is that a function of competition? Are you seeing like rise in competition in that space and that is what's leading to that rise in advertisement? Second is on the real estate, I understand you mentioned that you are seeing some decline in new launches in the housing space. Given the recent liquidity crisis in the NBFC space, what are the early trends you're seeing in that space? And in the last few months, I mean a lot of your competitors the likes of Quikr et cetera press have been reporting that they've been reporting 40%, 50% kind of a top line growth. So in the real estate space as well, are you seeing like increased competition from some of these smaller players, if you can address that?

[Hitesh Oberoi, Co]

Yes, so in the job space, basically, see, what happens in the job space, we are not seeing competition when it comes to customers. Because we are -- our business is growing at a very healthy rate. Billings this year have been up 20% for the first -- almost 20% for the first 9 months, which is actually stronger growth than what we saw in the last 2 or 3 years. But we've been out of media for long, and our competition has been aggressive in media and for a while now, it's been like almost 2, 3 years at sort of some of them are spending aggressively on media. So I think we -- just -- and some of these are judgment calls. It's not as if by spending in media tomorrow, our traffic will sort of go up substantially or anything of that sort, but it's -- we just feel that it's time to sort of go back in media, market has been looking up for a while. And if we go to media -- go into media at this point in time, we may benefit in the long run, right? So it's a call -- it's not as if we go -- if we don't sort of advertise tomorrow, our business will crash or anything of that sort. As far as real estate is concerned, see, like I mentioned, see, we -- what we are noticing, for last year, our business was impacted in fact severely because of demonetization, RERA, GST, et cetera. So all those issues are now behind us. So the issues like these are now behind us, but the real estate market has been in sort of bad shape for a while. What we are now sensing is that the real estate market is, at least, stabilizing. Transactions have started looking up at least in some geographies, especially in the west and the south. And prices are sort of stable and going up in pockets as well. Now it's very hard for me to say what's going to happen going forward. The -- our sense is that the NBFC crisis may have impacted lending to sort of -- or financing to builders and also some home loans and what we are seeing for sure is a decline in new launch activity. Now whether that is because of the NBFC sort of crisis or not I do not know, but certainly new launch activity has slowed down. And some -- we of course, get some percentage of our revenue from new launch because when companies sort of -- when builders launch projects, they make a lot of noise at the time of the launching, but-- so that has slowed down. But there is a lot of unsold inventory still in the market, especially in the north and some other geographies. And if you go by current sort of sale rates, this unsold inventory will take some -- a couple of years at least, if not more, to clear still, right? So as far as competitive intensity in the real estate space goes, the real estate portals are still -- still very aggressive because we are hopeful and bullish that the market will improve going forward.

[Operator]

We have next question from the line of Vivekanand from AMBIT Capital.

[Vivekanand Subbaraman, Media Analyst]

So we've been noticing that there has been a marginal decline in the average number of resumes added daily. So is it the case that the candidate -- candidates are getting lured by aggressive advertising of our rivals and we are lagging behind slightly? Second question pertains to the billing growth in real estate. So in 99acres, we have over the last 3, 4 quarters, we have ranged at around INR 45 crores to INR 50 crores in billing. Is that something that on -- can we grow on this base? Or how should we see the early signs that you are seeing given that the launches have slowed down, but brokers continue to remain aggressive?

[Hitesh Oberoi, Co]

Yes. So to answer your first question, see, we've been toying around -- we've been sort of tinkering around with our marketing mix a little bit. We are experimenting with a few new things. We were getting a lot of CVs earlier, but we've slowed down acquisition because we are now focusing a lot more on getting quality CVs, which are a little more expensive to get when you advertise for them. Otherwise, it's not very hard to get CVs in India because in a country of 135 crore people, but we want CVs which our clients are interested in and that's always harder to sort of do. We are thinking around the marketing sort of mix and to see what happens. Yes, we have seen a decline, but some of it is planned. However, we are still sort of -- we haven't figured out the right formula on this front as yet. Like I said, the TV ad spend does not really contribute significantly towards increase in traffic on the platform given our large base. It's more for sort of being there and building brand awareness. A lot of our CV acquisition is through online channels. And there we are experimenting. So a little early for me to comment on this. Also, what happens is as we improve our systems and software and our engagement tools, enough people who use to come back and register again actually reactivate their old CVs and they don't need -- really need to register. So partly, it could be that as well. But I don't have all the answers on this front at the moment. We'll probably have better sort of answers 3, 4 months down the line once we are done with all the experimenting that we are doing right now. As far as the real estate market goes, see, like I said, all the big issues are behind us, which were impacting the industry, but the real estate market has been in a slump. There is a new issue, which is this whole business of NBFC lending to builders and lending for home loans and so on. Now we don't know how big this -- how big and serious and deep this issue is. New launch activity has slowed down and yes a substantial part of our new home revenue used to be new launches. But like I said, there is still a lot of unsold inventory and this unsold inventory is not going away in a hurry. I mean at current sale rates, unsold inventory is going to take another 2 to 3 years minimum to clear, right? So -- and so we are still bullish on the business growing. We don't know whether it's going to grow at 30% or 40% or 50% going forward, but we are still hopeful that it will continue to grow.

[Operator]

We have next question from the line of Pranav Kshatriya from Edelweiss Securities.

[Pranav Kshatriya, Research Analyst]

My first question, can you give us some color on how Policybazaar is doing? And how you see investment in that going forward? That's my first question. Second question is on Jeevansathi, the burn rate seems to have increased, are we comfortable with this burn rate? Or you think there is an upward or downward movement possible?

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

So Policybazaar, I think, is well placed for funds, it has just raised around a few months back. It's increased investment in marketing lately, but it is market leader. It's a dominant market leader in insurance comparison. It is probably a market leader in Paisabazaar as well. But there is it like kind of -- it's not as dominant as it is in insurance comparison. And there is substantial inbound interest for investment in Policybazaar. So I don't think it's going to be short of cash anytime, and I think they can turn profitable whenever they want in the Policybazaar business.

[Pranav Kshatriya, Research Analyst]

If you can just highlight what are the aspirations of Policybazaar in the broader scheme of things? Are they satisfied with where they are today, in leadership position? Are they looking to diversify in more verticals or anything like that?

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

Well, no, so there are 2 parts to the business, there's Policybazaar and Paisabazaar. So if you take the Policybazaar part of business, they want to do more and more things in and around the insurance space, whether it's in health insurance or it's in motor insurance, or it's in other kinds of insurance, or whether it's in launching of digital products in collaboration with other insurance -- with insurance companies and so on. They want to use their data to help their partners develop smarter and better insurance products, all of those things. So they will go deeper and deeper into the insurance space by evolving, innovating and launching new offerings.

[Hitesh Oberoi, Co]

And to answer your question on Jeevansathi, see, we upped our marketing, see, the space is very competitive right. I mean all the players are spending a lot of money and there is a lot of pricing pressure as well. There is price war going on, at least, in the north and west and -- so we did well for about 2, 2.5 years, but the last 2, 3 quarters have been slow. We upped -- we have been upping our ad spend to sort of compete. And there is [ scope ] for optimization. It's not as if our ad spend -- we'll continue to sort of spend very, very aggressively. There is sometimes when you scale up ad spends, you do that but over time, you optimize. And that's what we are working on right now. And our revenue growth hopefully will sort of slowly start bouncing back if we execute it well. But very difficult to say how the market is going to pan out like I said, there are 2 other players who are much bigger than us and they're also spending a lot of money.

[Pranav Kshatriya, Research Analyst]

So I mean -- do you have any budget in mind or you have any aspiration that you don't want to -- or advertisement budget per se you don't want to be lesser than the competition anything like that? What is the benchmark which is prompting the high cash burn in Jeevansathi is what I'm trying to figure out?

[Hitesh Oberoi, Co]

No, so we believe that we have a play in this space. We have been executing well for the last 2, 3 years. The last 2, 3 quarters have been sort of a little sort of difficult, like I said, because of competitive intensity going up. And we've been gaining share in this market. Our volumes are up substantially over the last 2, 3 years. So our sort of assets are very limited in this space right now. We want to continue to do well in the communities in which we sort of operate. We're virtually sort of -- we're really strong in the north and the Marathi sort of belt, we don't really exist in the south. And we want to continue to invest and do whatever it takes to maintain and grow our shares in these communities.

[Operator]

We have next question from the line of Darpan Thakkar from HSBC Securities.

[Darpan M. Thakkar, Analyst]

I have three questions. One is again on advertisement, so recently advertisement on Naukri has increased. Do you see that this trend will result in much higher revenue growth 1 or 2 years down the line? Maybe more than 20% for a continuous period of time? Second is on 99acres, will it be possible to view number of individuals also, which are paying on the platform and also billing break up? And third is on Meritnation, just idea about what's happening with the company?

[Hitesh Oberoi, Co]

See, Naukri ad spends are up. But let me tell you, we used to spend a lot of money on advertising on Naukri 5 years earlier as well. But ad spends are basically sort of -- and the ad spending is up mostly on TV and this is to more build brand awareness, especially with the newer consumers and the newer job seekers in the market more than anything else. It's not as if it's going to directly impact our revenue today or tomorrow. Like I said, if you stop advertising in Naukri, also it's not as if our revenue growth will go down from wherever we are today to half or less than half of that, that's unlikely to happen. Revenue growth is more a function of hiring in the market and our penetration with customers, our sales efforts and pricing and so on, our new customer acquisition, in the short run. Yes, in the long run, in the -- they are a function of the number of resumes we have, and it's also function of our traffic share, it's also a function of multiple other things. So this effort to sort of -- this advertising spend increase that you're seeing in Naukri is sort of -- just to sort of revive our brand and to sort of build awareness amongst younger audiences more than anything else. Sorry, what was the second question? I missed that.

[Darpan M. Thakkar, Analyst]

On 99acres, billing break up, and individuals, number of individuals who are paying?

[Hitesh Oberoi, Co]

So as of billing breakup, we don't give out breakups but the size is 3, 4 owners who advertise. There are some paid services that offer to owners, small fraction of the owners avail of those services. It's a tiny part of our revenue, not very sort of significant at this point in time. Yes, and the breakup, we don't give any geographical breakup or any segment-wise breakup.

[Darpan M. Thakkar, Analyst]

Not geographical, I'll say broker, builder and who knows.

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

[indiscernible]

[Hitesh Oberoi, Co]

So about -- it's slightly more than.

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

Roughly 45% from our builders.

[Hitesh Oberoi, Co]

Yes, about 40% to 45% of our revenue is from builders.

[Darpan M. Thakkar, Analyst]

Okay, okay, that's fine. And on Meritnation, just an idea about what's happening with it, I mean, you are the majority stakeholders there so?

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

So the company has been through a difficult time, but now it's bouncing back nicely. It's growing well. It is still burning money, but we have -- let's see how this -- the peak season just started Jan, Feb, March, let's see how this peak season goes but we are hopeful.

[Darpan M. Thakkar, Analyst]

So will it require further investment in the near future.

[Sanjeev Bikhchandani, Founder & Executive Vice Chairman]

Almost certainly, it will require further investment. Let us see whether we can get an external investor or if we'll do it ourselves that remains to be seen.

[Operator]

We have next question from the line of Anandha Padmanabhan from Renaissance Investment.

[Anandha Padmanabhan]

On to Jeevansathi side, could you throw some light on how have the realizations moved in the last couple of quarters? And also, with the increased competition, do you see any scope of consolidation in this particular industry?

[Hitesh Oberoi, Co]

We don't give out realizations, but what I can tell you is that our volume growth has been fairly substantial over the last 2, 2.5 years. Like I said, there is a price war and people have been dropping prices but that drop -- price drop has also resulted in a higher volume over the last 10 or 12 quarters. So -- and as far as consolidation is concerned, I really can't comment. It depends on what the other companies want to do. There are 2 other players in this space, they are much bigger than us. So let's -- I don't know how this is going to pan out. I can't say anything right now.

[Operator]

[Operator Instructions] We have the next question from the line of Ankur Rudra from CLSA.

[Ankur Rudra, Research Analyst]

First question is on Naukri. Historically, we have seen whenever Naukri growth has accelerated beyond the mid- to late teens, we've seen some element of margin expansion. We've seen, I think, 2 quarters of very strong growth and looks like the trends are that way. How should we think about margins there, with respect to I guess your advertising spending? That's one, secondly, on 99acres, if you could highlight where the growth is coming from a geographic perspective? Is it more your core NCR market? Is it more west and south where you're -- I think where you said there is more stabilization?

[Hitesh Oberoi, Co]

So actually, you're right. So in the past, whenever we've seen higher top line growth in Naukri, we've seen margin expansion. So actually, what we're doing this time is using this top line growth to make all the investments we've been wanting to make in the business for a while. So like I said, we've significantly beefed up our product, data science and technology efforts. We are sort of trying to build some new products. Now, some of these things will work out. Some of these things will fail, but if we get even 1 or 2 of these right, then that will set us up for growth in the medium term, irrespective of what happens to the market. So we're basically in an investment phase in Naukri in -- with investing a little more in brand awareness as well, investing a lot in new products, investing a lot in new sort of areas like data science, which if we execute well, we could potentially reap a lot of benefit in the times to come. Some new technologies are available, which were not available earlier which could solve problems, which have not been solved for a long time for both our customers and our job seekers. So like I said, we're investing, let's see what happens. And what this also means, we're also upgrading the quality of senior management we have in Naukri and so on. So these are sort of long-term investments, and the results will show in the medium term not in the short term. So as far as 99acres is concerned, growth -- we saw all around growth, it's not as if growth is restricted to a few markets. All our markets have been responding well. Now of course, some geographies will be growing at 25%, some at 35%, and so on, but we are seeing growth in all our markets.

[Ankur Rudra, Research Analyst]

Are any market particularly laggards in your -- from a geographic perspective?

[Hitesh Oberoi, Co]

So there are some markets where we are weak. So I would not say that is because of the market. There are-- so -- while we -- if we have a 50% share nationally, there are some markets where we have a 60% share, and there are some markets where we have a 40% share. So that's more often a function of our share position in those markets and our execution rather than whether some markets are doing well or not from a real -- overall real estate market perspective.

[Ankur Rudra, Research Analyst]

There has been consolidation in the quarter with Quikr acquiring your competitor in the south. What does that mean for your traffic share and your market position?

[Hitesh Oberoi, Co]

So you mean IndiaProperty, which one did you point out?

[Ankur Rudra, Research Analyst]

Yes, that's right, yes, IndiaProperty.

[Hitesh Oberoi, Co]

Yes, so IndiaProperty from our understanding, it's a very small sort of player in the scheme of things and mostly restricted to the south. So -- and they have contracted over the years. So I don't know if they have given out the numbers, but I don't think it's a very sort of -- certainly in terms of traffic share they are nowhere, and in terms of revenue, I don't know the latest numbers, but they are very, very small. Yes, there has been some consolidation in the past, Quikr also acquired CommonFloor and bunch of other players in real estate, but as far as the real estate portal market goes, I would still say that it's dominated by a couple of players.

[Operator]

We have next question from the line of Vivekanand from AMBIT Capital.

[Vivekanand Subbaraman, Media Analyst]

Continuing on the discussion that you had on redeploying some of the extra revenue growth that you got into investments. So I understand that employee cost seems to be inflating at a fairly high pace because you are making more high-profile hires than before. In this light, how should we look at the employee cost growth and the interplay with margins? And I am referring to the overall standalone margins? And the interplay with revenue growth over the next 2, 3 years?

[Hitesh Oberoi, Co]

So right now, the approach we're taking is that this is what is required to be done in the business for the medium term. We need to hire senior -- more senior people, people who have management bandwidth, in Naukri. We need to invest more in product and technology. We need to invest new in -- in new areas like data science. We need to sort of build some new products and -- so we will make these investments and there is a cost to doing all this, and margins will actually be a function of ultimate revenue growth you get, right? So if revenue growth is solid, the market continues to be buoyant, margins may sort of improve or remain the same, who knows? So whether -- so if the GDP growth picks up and we get 25% revenue growth, it will be fine, but we -- the philosophy is that we continue to make these investments and margins will ultimately be a function of revenue growth we get. It's very hard to predict what revenue growth is going to be going forward.

[Vivekanand Subbaraman, Media Analyst]

Right. And on 99acres, your investments are primarily on marketing, is it? Because I'm just trying to understand some of the areas that you mentioned AI, machine learning, data science. Are you setting up, like common infrastructure that can be used across the standalone businesses? Or is it so that for each business you need a dedicated set of employees who can solve specific problems?

[Hitesh Oberoi, Co]

So we are organized along business unit lines. So every business has separate sales team, separate product team, separate engineering team. So there is nothing, which is like -- barring some -- barring functions like finance and HR, nothing is really common between businesses. Every business is run like a separate company. They have different competitors, they need to work at a different -- every business now needs to work at a different pace, and they need to prioritize different things. So that's our philosophy and that will continue. So we are not going to be sort of doing something, which is like making common investments or anything of that sort. And with 99acres like we said, a lot of investment is in marketing, but across-the-board, we generally sort of will continue to invest in like I said, in product technology, innovation and data science. That's going to happen -- continue to happen in all our verticals.

[Operator]

[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Hitesh Oberoi for closing comments. Sir, over to you.

[Hitesh Oberoi, Co]

Yes, thank you everyone, for being on the call, and have a great evening. Thank you so much.

[Operator]

Thank you very much, sir. Ladies and gentlemen, on behalf of Info Edge India Limited, that concludes this conference call. Thank you for joining with us, and you may now disconnect your lines.