Info Edge (India) Ltd

NSE:NAUKRI

Earnings Call Transcript 2022-Q4

[Anand Bansal, executive]

Good afternoon, everyone. Thanks for joining us today. I'm Anand Bansal, and I will run this conference, along with my colleague, Vivek. We will wait for a moment as people join and settle in the virtual conference room. We will start the conference in a minute.

Good afternoon, everyone. Thanks for joining us today. We will wait and start the conference in a minute. Let's start the call. We have 80-plus people with us, Vivek. You may start the conference, Vivek.

[Vivek Aggarwal, executive]

Hi, everyone. Good evening. I welcome you to Info Edge (India) Limited Q4 '22 and Financial Year '22 Financial Results Conference Call. [Operator Instructions] Please note that this call is being recorded.

Joining us today from the management side, we have Mr. Sanjeev Bikhchandani, Founder and 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 investor presentations for detailed disclaimer.

Now I would like to hand over the conference to Mr. Hitesh Oberoi for his opening remarks. Thank you, and over to you, Hitesh.

[Hitesh Oberoi, executive]

Thank you, Vivek. Good evening, everyone. Hope you're all doing well. Welcome to our fourth quarter earnings call. We take the privilege of announcing our Q4 '22 and FY '21/'22 financial performance of the company. We will start with the overall financials and then cover each business vertical in more detail. And then, of course, we'll have time for Q&A.

The audited financial statements and other schedules on segmental billing, revenues, et cetera, along with the data sheets, have been uploaded on our website, infoedge.in.

I'll first take you through our stand-alone financials. Billings in Q4 were up 52.5% year-on-year at INR 649.3 crores. FY '22 billings stood at INR 1,866 crores, a year-on-year growth of 58.7%. Revenues in Q4 were INR 455.5 crores, a year-on-year growth of 51.6%. FY '22 revenue stood at INR 1,562.5 crores, an increase of 38.5% year-on-year. Operating expenses, excluding depreciation, for the quarter grew 35.5% year-on-year and stood at INR 327.5 crores. For FY '22, operating expenses were INR 1,098.7 crores, a growth of 30.8%. EBITDA for the quarter stood at INR 128 crores versus INR 58.8 crores in Q4 of last year, a growth of 117.6% year-on-year. FY '22 EBITDA grew 61% to INR 463.7 crores from INR 288.1 crores reported last year. EBITDA margins for the quarter stood at 28.1% compared to 19% -- 19.6% in Q4 of last year. For FY '22, EBITDA margin stood at 29.7% versus 25.5% last year. Cash EBITDA for the quarter grew 84.8% year-on-year and stood at INR 341.7 crores. Cash EBITDA for the full year stood at INR 811.6 crores, a year-on-year growth of 140.3%.

Deferred sales revenue stood at INR 819.6 crores as of 31st March 2022 versus INR 521.6 crores as of 31st March 2021, an increase of 57% year-on-year. The cash balance at the IEIL level, overall level, stands at INR 3,759 crores as of 31st March 2022. The balance stood at INR 3,558 crores as of 31 March 2021. During this quarter, NCLG also approved the merger of iimjobs with Info Edge. According to the numbers of the stand-alone business and the recruitment business that we will discuss in the later part of the call, it will be inclusive of iimjobs financials for current as well as previous periods.

We will now talk you through what we are seeing in the market in our different verticals, and then we will discuss financials for each vertical. Starting with recruitment, the hiring market continues to be strong. Our IT customers continue to see increased hiring pressure on account of high attrition and the increasing gap between demand and supply of IT talent, thanks to the digital transformation story that is playing out globally. We also saw an increase in demand for freshers on our platform last year and also in the last quarter of last year. In the last 2 quarters, we have started seeing demand for non-IT talent also come back as the economy continues to open post pandemic.

Q4 saw an average increase of 30% in the Naukri JobSpeak index. Non-IT sectors like BFSI, retail, hospitality, pharma and telecom also demonstrated healthy growth as concerns related to COVID reduced drastically during the quarter. The JobSpeak index for the month of April grew 38% year-on-year with sectors like travel and hospitality growing over 100%. We are watchful of recessionary trends in the U.S., which could impact IT hiring the coming months. Fingers crossed on this one.

Moving on to the real estate vertical. Well-known builders are seeing a strong revival of demand for nearly ready to move in homes. There is an escalation in cost of construction of new homes, which could result in higher price of new homes going forward. Real estate prices have started moving up in some pockets. And while it seems like after a long time affordable real estate prices, combined with rising incomes, lower home loan rates and demand for bigger homes post COVID are likely to lead to the real estate market picking up in the months to come.

The Matrimony market continues to grow at 5%, 10% per annum. We are beginning to see the emergence of small serious dating category in addition to casual dating now. The edtech segment continues -- remains vibrant, and education search and research traffic continues to grow well.

Moving on to financials, we will discuss the recruitment business first. In Q4 of '21/'22, recruitment segment billings grew 66.6% year-on-year and stood at INR 513.3 crores while revenues were INR 344.4 crores. Revenue grew at about 64.7% year-on-year. For FY '22, recruitment billings are up 72.6% year-on-year to INR 1,436.4 crores, while revenue grew year-on-year by 44.2% to INR 1,154.2 crores. EBITDA for Q4 stood at INR 206.9 crores compared to INR 104.9 crores in Q4 of 2021, a growth of 97.2%. EBITDA for the full year for the recruitment vertical stood at INR 679.8 crores, a year-on-year growth of 55.4%.

Margins at the business grew 10% from 50.2% in Q4 '21 to 60.1% in Q4 '22. EBITDA for the full year stood at -- EBITDA margin for the full year stood at 58.9% compared to 54.7% in FY '21. Cash EBITDA for Q4 in the recruitment vertical grew 89% year-on-year to INR 386.2 crores. And cash EBITDA for FY '22 -- for the full year for the recruitment vertical stood at INR 987 crores, a year-on-year growth of 110.1%.

New CV registrations in Q4 stood at INR 21,000 per day, while CV modifications per day stood at INR 417,000. Traffic share remained stable, and daily active users are at an all-time high on the platform. During the year, we took several steps in our recruitment business to keep up our offerings to cater to changing consumer and customer requirements. We saw an increase in hiring of freshers through our first Naukri platform. Accordingly, the product was revamped to attract and handle more traffic. We continue to invest behind our ambition of offering to help job seekers find the right place to work and to research salaries, et cetera. We also augmented our assessment services for job seekers on a wider scale through our platform, DoSelect. In these times of high attrition and growth, Naukri has emerged as a high-value recruitment tool for most recruitment firms and companies. This helped us in driving value-selling proposition in most of our sales discussions and helped us rationalize discounts. There is also an increasing focus on adding new customers on the platform. Most of our new customers are now being acquired through the online mode.

A little bit on DoSelect and Zwayam, our 2 recent acquisitions. DoSelect, our recent acquisition in the assessment space, generated a revenue of INR 16.2 crores for FY '21/'22. The business then reported revenue of INR 4.2 crores in FY '21. We saw similar growth in Zwayam this financial year with revenues growing from INR 6.5 crores in FY 2021 to INR 11.6 crores last year.

Moving on to the real estate vertical, 99acres. Billings in Q4 in the 99acres business stood at INR 79.3 crores, a year-on-year growth of 10.6%, while revenue stood at INR 61.3 crores, a year-on-year growth of 22.3% from INR 50.1 crores from Q4 of last year. For FY '22, billings grew 25.1% year-on-year to INR 231 crores while revenue grew 25.1% and stood at INR 217.3 crores. EBITDA for the quarter stood at a loss of INR 33.8 crores. EBITDA for the full year stood at a loss of INR 78 crores against a loss of INR 22 crores booked in the last financial year. Cash loss during the quarter stood at INR 11.2 crores against a cash profit of INR 5.7 crores in Q4 of last year. And cash loss for FY '22 stood at INR 54 crores against a cash loss of INR 12 crores in FY '21.

Seeing growth in the real estate sector and an aggressive stance by our competitors, we increased our marketing spend by almost 44% Q-on-Q in 99acres last quarter. We launched premium listings. This product has been received -- has received an encouraging response from the advertisers during the quarter. With market recovery now back on track, we are seeing old broker and builder clients return to the platform. And with reduced inventory levels, we expect increase in new project launches in the sector going forward. Growth of unique users and traffic on the platform shall be priority for the next few quarters. We will continue to invest in both operations and marketing.

During the quarter, we also announced an investment of INR 137 crores into 4B Network. This venture aims at providing edtech platform to connect agents to builders on the one hand and track and aggregate new home site visits and home loans on the other to make it easier for all participants in the market.

Moving on to the Matrimony vertical, Jeevansathi. Billings grew 5% year-on-year to [ INR 28.1 crores ] and revenue for the quarter stood at INR 25.4 crores, down 1.9% compared to Q4 of last year. FY '22 billing grew by 1.5% year-on-year to INR 109.1 crores, and revenue grew to INR 100.2 crores from INR 96.9 crores in FY '21, a year-on-year growth of 3.4%. EBITDA losses stood at INR 38.8 crores in Q4. FY '22 EBITDA loss were at a loss of INR 120 crores against a loss of INR 95.6 crores in FY '21.

Cash cost for Jeevansathi during the quarter stood at INR 34.8 crores, up from a cash cost of INR 20.9 crores in the same quarter of last year. Growth in Jeevansathi stabilized in Q4. And like we mentioned in the last -- in our last earnings call, we have reworked our strategy. We have introduced several free offerings this quarter. This will result in revenue taking a hit for the next 2 or 3 quarters. We are still evaluating the impact of these changes. We hope that they will help us gain serious traffic share in this category going forward.

During the quarter, we also announced an acquisition of 76% of IL Network Private Limited. IL is engaged in the business of running multiple serious dating platforms on the web via its mobile apps. For FY '21, IL reported a revenue of INR 7.56 crores. We are quite optimistic of this space and expect the business to grow well going forward.

Moving on to our education vertical, Shiksha. In Q4, Shiksha billings grew by 48.2% year-on-year to INR 28.7 crores while revenue grew 58.8% year-on-year to INR 24.4 crores. FY '22 billing and revenue grew 64.5% and 59.2%, respectively, and stood at INR 96.5 crores and INR 90.7 crores, respectively. EBITDA for the quarter stood at INR 4.8 crores compared to an EBITDA of INR 28 lakhs in Q4 of last year. FY '22 operating profit stood at INR 19.5 crores against a profit of INR 4.1 crores in FY '21. Cash profit for the quarter stood at INR 10.6 crores, up from INR 4.3 crores in Q4 of last year. Cash profit for FY '22 stood at INR 28.7 crores, up from INR 5.8 crores reported in Q4 of 2021. We continue to invest more in the Shiksha business and aggregating volumes for content for our users on our platform.

Moving on to our financial investments. In January 2020, we launched the Info Edge Venture Fund with the fund size of USD 100 million in partnership with MacRitchie Investment Private Limited, an indirect wholly owned subsidiary of Temasek Holding Private Limited. By 31 March '22, the fund has been able to successfully invest 80% of its purpose. Of the 28 investments made through the fund, 10 have been able to raise a follow-on from market investors at a higher valuation. The company now proposes to set up 3 AIF schemes, already approved by SEBI with a target corpus of USD 325 million. Info Edge and MacRitchie Investments Private Limited have committed to approximately 50% each of the total corpus of the schemes. The relevant approval from the shareholders as per SEBI listing regulations and NCS circulars have been secured through a postal ballot on 21 May 2022. These funds will have a slide for 12 years and further extendable by 2 years as per SEBI regulations.

At the consolidated level, the net sales for the group stood at INR 472.9 crores versus INR 300 crores -- INR 300.5 crores in the same quarter of last year. The consolidated entity at the total comprehensive income level, there is a loss of INR 6,420.8 crores versus a gain of INR 311.9 crores in corresponding quarter of March 2021. Adjusted for the exceptional items, PAT stood at INR 245 crores in the quarter ended March 2022 versus a loss of INR 39.6 crores in the corresponding quarter of last year.

Thank you. This is all from us. We are now ready to take any questions that you may have.

[Vivek Aggarwal, executive]

Thanks, Hitesh. We'll now begin the Q&A session. [Operator Instructions]

[Anand Bansal, executive]

Thank you, Vivek. We have a couple of questions. So the first question is from Vivekanand Subbaraman from AMBIT Capital.

[Vivekanand Subbaraman, analyst]

My couple of questions are on Naukri. So Hitesh, I heard that you mentioned about the -- your watchful stance on the U.S. recession. Can you elaborate a bit further on this and how it has been in the past for you? Because I mean it has been a very long time since the U.S. went into recession. So that's question one. And secondly, what is your best guess of the proportion of IT hiring that happens through Naukri.com? And how has this trend moved in the last 2 years?

[Hitesh Oberoi, executive]

On the U.S., we are not forecasting a U.S. recession, okay? I was just sort of reacting to the various news items in various sort of media, which we have been reading for the last few weeks. And as far as we are concerned, we are not seeing any slowdown as yet in the market. Q4 was our best quarter ever in the last 15 years. IT hiring is still very, very hard. Salaries are going up. Attrition rates are high. Companies are looking to hire more fresh talent to control costs because lateral hiring is just also hard.

So at the moment, we are not seeing any slowdown in IT hiring, but I don't know what is likely to happen going forward, given inflation, given the geopolitical situation and so on and so forth. So in our history, we've seen 2, 3 sort of serious slowdowns. There was a serious slowdown in 2008. And then there was, of course, COVID. What we've seen so far is, if there is a serious recession, even serious recessions don't last for more than 2, 3 quarters, and then life goes back to normal. If it's not a recession, just a temporary slowdown, if Indian is -- slight slowdown in economic growth. And that one can take in one stride, that may not impact anybody too much. Only a serious recession is something we need to worry about. So I don't know if that answers your question. You had another question, right?

[Vivekanand Subbaraman, analyst]

Yes. So my -- the second question was on the proportion of IT hiring I believe happens -- and how has it trended over the last few months.

[Hitesh Oberoi, executive]

Well, it's different for different companies, the services companies, I suspect end up doing at least 30%, 40% of the lateral hiring through Naukri. For product companies that maybe 25%, 30%. In certain cases, it could be as high as 50%, 60% as well for customers. If I were to take a number and sort of give as an average for the industry as a whole, I would take a number of more like 35%, 40%. That is what is probably the share of Naukri in all hiring at some of these companies.

How has it changed in the last 2, 3 years? Maybe it's gone up by a couple of percentage points. It tends to sort of be very high in a slow market because in a slow market companies can take their time to hire and they're not in a hurry. In a fast-moving market or in a hot market, companies are under tremendous pressure to hire. It's very, very difficult to hire, so they activate almost every channel to hire people. So it probably goes down a little bit in sort of hot markets, goes up in slow markets.

[Vivekanand Subbaraman, analyst]

That was useful. Just one follow-up. You have been looking to build [ segments ] on recruitment through acquisitions and also through your own products. So what are the niches or segments of recruitment where you think employers is lacking? And where will the investments be focused?

[Hitesh Oberoi, executive]

Yes. So we've already signaled that to our acquisitions and the various sort of new initiatives that we are pursuing in-house. So premium hiring or hiring a premium talent was a weak area for us, which is why we acquired iimjobs a few years ago, and we are now trying to sort of build that -- take that business to -- a product to more customers in our sort of portfolio. AmbitionBox is the start-up we acquired many years ago. AmbitionBox is now as big as Classon in India. So if you want research companies, you want to research salaries, you want to research into your questions, AmbitionBox is where you go today. So that business has really grown. That site has really grown in terms of usage and traffic over the last 3 years for us. It's really sort of big now.

FirstNaukri is something we've been investing behind for the last few years. That business grew at more than 100% last year because campus hiring really moved -- picked up last year and is likely to stay strong this year as well. Then we acquired DoSelect. So we take fee-based hiring will sort of increase going forward and companies will need platform to sort of assess skills, and that's where DoSelect sort of fits in. That business grew INR 16 crores last year. Again, it's a very good product, very good team. What we are doing is using our sales just to take the product to more customers.

And then of course, Zwayam, which is our applicant tracking and agent system or recruitment management software, which last year became a part of our portfolio. Our long-term plan is to add more and more machine learning to their offerings. And again, like use our sort of sales force to take their product to more customers. Internally, we are also investing behind JobHai, which is a blue collar platform. Early days, but that is scaling up nicely in terms of traffic in terms of testing the usage. We are also experimenting with a big shift, again, a premium platform for end-to-end hiring, so that they're focused on closing transactions for tech companies. Early days, started inside the company, but that is something we have been sort of playing around with for the last couple of years as well. So these are all the adjacent sort of areas where to start with the verticals may be small, the business can be small, but tremendous potential for the next 5, 7 years.

[Vivekanand Subbaraman, analyst]

Just one last question on recruitment, which is on the billing. So the number that we saw in the current quarter, does it have any lumpy year-end renewals that came through? Or is it fair to assume that this is the run rate that will percolate into revenues in fiscal '23?

[Hitesh Oberoi, executive]

No, this is -- I would not call it the run rate because Q4 is our biggest quarter, and there are lots of renewals which are due in Q4. And so there is seasonality in our business. It was of the [ subscription ] business. And so -- and Q4 is always our biggest quarter. So the growth rate in Q4 is, of course, in -- maybe if the market stays the same, then you can extrapolate that for future quarters. But that is, of course, a big if. But the base for every quarter will change. Because Q1 last year, for example, was much smaller than Q4 the year before last. So you can't say that this is the annual run rate.

[Anand Bansal, executive]

Next question is from Pranav from Edelweiss.

[Pranav Kshatriya, analyst]

I have a couple of questions. My first question is regarding the slowdown in hiring, especially in the start-up world. I mean this has implication on the 2 sides. One is somewhat your employee cost is also linked with. And so how should we see this? And secondly, on the recruitment business side that you will have some revenue which can potentially slow down. So how do you see this impacting in the current scenario?

[Hitesh Oberoi, executive]

Well, if the slowdown is only start-up hiring, that is actually a positive for us because we don't make a lot of revenue from start-ups. They are a very tiny part of our revenue. On the other hand, we lose a lot of people to start-ups and big tech companies. So if start-ups and big tech hiring, as in the Internet kind of hiring slows down, then that may actually should be a benefit to us because it will help us control our costs and wages on the other hand cannot affect our revenue so much. On the other hand, if there is a slowdown in IT services, hiring in product companies hiring, back offices hiring, desk centers hiring, that is likely to hurt us because a large part of our revenue comes from some 8,000, 10,000 companies in the IT space [indiscernible] and that, I guess, is more indexed -- is going to be more indexed to what happens to the U.S. market than anything else.

[Pranav Kshatriya, analyst]

Sure. My second question is, can you please elaborate how do you see the philosophy on the investment in the listed space? So for example, you have a large investment in Zomato and Policybazaar. So how should we see this in the longer term? That's what I would like to know.

[Hitesh Oberoi, executive]

Did you want to take that, Chintan?

[Chintan Thakkar, executive]

Talking about -- sorry.

[Hitesh Oberoi, executive]

Yes, absolutely.

[Chintan Thakkar, executive]

So look, we are still figuring it out. We are locked in until July in Zomato, and we are locked in until, I think, a few months later, I think November [indiscernible] So we still have some time we figure it out, but we haven't taken a view on it yet. But look, as long as there's enough growth to the companies and there is -- we don't have a competing use of the cash, we -- there may be substantial value to be built by staying on. But on the other hand, if we believe there isn't growth left or we have competing use for the cash, maybe we'll look at exit, but we've not taken a call on it.

[Pranav Kshatriya, analyst]

Sure. If I can just ask one follow-up on this. I mean the valuation in the start-up world seems to be correcting. In that sense, are you looking to accelerate your deployment of the cash in the AIF in the current period? Or how are you seeing this space?

[Chintan Thakkar, executive]

For first one has invested 28 companies. It won't do any new companies. Whatever on is left that will be used for follow-ons in the current companies. There are follow-on fund, which will be further for the follow-on in the current company. And there are 2 new AIFs, which will be for new companies. Now we are being a little careful, discerning, figuring it out. You see a few things have changed in the last 2 to 4 months. You've got to go for companies where if you believe it's going to be heavily cash-consumptive over the next few years, there's a risk of it not getting an external investor. And therefore, we'll be a little careful. I think we won't invest in a hurry. We will be very, very discerning.

[Anand Bansal, executive]

Next question is from Vijit Jain from Citi.

[Vijit Jain, analyst]

Part of my question was answered in the previous part. Just a follow-up on that investment strategy, Sanjeev. Is there any change in views regarding which stage of companies you would invest in, given that now maybe in the private space a lot of companies will come in at more reasonable valuations? That's part one.

[Chintan Thakkar, executive]

You want to answer that?

[Vijit Jain, analyst]

No, no, yes. So my question was, is there any change in views regarding...

[Sanjeev Bikhchandani, executive]

We still go early stage. We'll still be like the first institutional check-in. The thing about growth in late-stage investments is that if the valuation is lower, there's a reason. And if a company is still burning cash, it's going to consume our cash, and we are not in the big money game. Our fund sizes are modest, right, $100 million -- $150 million in revenue. They are not large funds. So if somebody is raising $50 million, $60 million, $70 million, there is no way we can support that kind of round and for a small ownership. And for -- and when the market is correcting, even at a lower valuation, if the operating risk is high, it's still very risky investment.

[Vijit Jain, analyst]

My second question is to you, Hitesh. If you can talk about the A&P spend outlook into FY '23. And also, any views on your own hiring for your own team in FY '23? Is that going to continue to go up because of product investments? Or how should we think about that?

[Hitesh Oberoi, executive]

Yes. So let's start with A&P. So see, look, we look at advertising and marketing expenses quarter-by-quarter. We don't have a budget for the year. We spend money, evaluates the impact of the spend and then course correct and fine tuning as we go along. Now what I can tell you for sure is that Jeevansathi high ad spend continue because that's the nature of the beast. Our competition is also spending aggressively. We also need to spend aggressively to stay in the game.

99acres also will likely to spend more money than last year. Because again, that market has also become very competitive. There's a lot of competitor in that market. We may spend a little more in Naukri because that business is doing well. And I mean, just sort of -- just sort of bit some brand we completed out of [indiscernible] spend a little more in Naukri as well. But like I said, it will be quarter-on-quarter we see how the sort of how the market sort of shapes up and plan accordingly.

As far as hiring goes, we will continue to hire in our newer verticals, so verticals which are small, but likely to grow in the long run. These are investment modes, so whether it's the study abroad vertical in Shiksha or whether it's JobHai, the blue collar vertical that we are building, which generates more revenue, or whether it's BigShift or whether it's AmbitionBox or Zwayam or DoSelect. In these verticals, we will continue to sort of invest more and more. And again, like I said, we are watchful. We invest for 6 months, see the impact and then again review and so on.

In our regular verticals, we may hire a few people more in functions like sales, operations, customer service as business grows. We are unlikely to seriously -- or sort of invest a lot more in technology and product and in terms of number of people in our traditional core operations because I think that is adequately staffed for the moment.

[Anand Bansal, executive]

Next question is from [ Gite from Lagori ].

[Unknown Analyst]

Hitesh, congratulations on a great set of numbers. And this is specifically from the Shiksha point of view. I just wanted to understand the breakup of revenue. How much -- what is the percentage of penetration that you've gotten already from free and paid listing? That was the first question that I had.

[Hitesh Oberoi, executive]

Actually, penetration levels are very low, but I would not rush into them because we have all kinds of listings on our platform, a lot of German colleges are also listed on our site, and they are unlikely to pay over. So while most of our revenue comes from maybe 700, 800 sort of colleges and universities, and we may have 40,000-odd some very large -- on our platform, it's unlikely that they will pay over, right.

[Unknown Analyst]

Like just trying to estimate the growth potential over there and how much do you think there is -- I mean it's been growing at like above 50% for a long time. So how long can that sustain?

[Hitesh Oberoi, executive]

Very difficult to say in the Shiksha business. Our revenue is a function of the number of leads we are able to generate for our customers and the price you charge per lead, right? So now you have to keep growing at this rate, we will keep growing our traffic, improve conversion rate on our platforms. We have to be able to monetize each a higher price. It's not possible to sort of do this year-on-year every year for a long time.

So let's say -- I mean, hard to say whether we will be able to scale a traffic at this rate going forward also, right? Can we add new customer, new customers? Yes. Can we look at different revenue models? Maybe yes. For example, we're already experimenting. We're already sort of doing a lot on the study abroad side. Now study abroad, we are following a very different model on full stack. I think we are doing end-to-end transaction, and the study abroad business did a reasonable job last year. We generated about INR 20 crores of revenue from the study abroad business. And study abroad was from 0 3, 4 years ago. So it's a start and actually we plan to invest behind that business and grow it faster going forward. Let's see what happens. The domestic business kind of continue to grow at 50% year-on-year for a long time. It's going to be very difficult, unless we are able to back some new sort of model of growth.

[Unknown Analyst]

Got it. Got it. Also one last question is, what is the breakup between agency hiring and direct hiring on the platform right now from Naukri? Companies hiring directly versus...

[Hitesh Oberoi, executive]

Agencies? I think -- I mean I don't have the latest number, but [indiscernible] [ 25% ] of our revenue. Maybe we can take out the numbers and do it separate.

[Unknown Analyst]

Sure.

[Anand Bansal, executive]

Next question is from [ Mohit Moswali ] from Edelweiss.

[Unknown Analyst]

I have 2 questions. One is on the paid listings in 99acres. You see that the pay listings have come down over the last 2 quarters, but the billings have significantly increased. So can you give some insight on what has led to the increase in billings? That's my first question.

[Hitesh Oberoi, executive]

No, billings have gone up because billing per price -- we have upped our prices. We've sort of cut discounts. So that's the reason you are seeing more monetization per listing. Our response also gone up over the last few months. We have to be delivering a lot more to our customers. Now why have paid listings gone down? See, there are 2, 3 reasons. One, what happens in paid listings often went through brokers. And often, brokers used to put multiple listings for the same property, right? And when prices go up, they probably sort of become a little more careful about how many listings they post because they don't want to pay much more by posting the same listing again and again. That's one.

Secondly, I suspect, but this is just my suspicion right now, that the market has become a lot better than it was and properties are moving a lot faster. So earlier, it used to take maybe 4 months, 5 months, to sell a property. Now because the market has become a little better than it used to be, maybe you can -- you put up a property, you start getting the response, you can maybe get out in 2, 3 months, on the average. So it's a faster-moving market as well.

[Unknown Analyst]

Sure. That's helpful. And my second question is on the matrimony business. So I know that you have been very bullish on the matrimony space in the last 5 years...

[Hitesh Oberoi, executive]

Carry on.

[Unknown Analyst]

Sure. So in the last, like, 5 years, I think it has been making losses at the EBITDA level. So I believe the -- what you're betting on is the number of paid profiles will come up in the matrimony space side, but there are no repeat use cases. If you look at the matrimony segment, there won't be any repeat use cases. So how are you seeing the future of this matrimony space? Are you expecting more paid profiles or -- because the pricing power may not be there [indiscernible] competition.

[Hitesh Oberoi, executive]

So see, we've done badly in the matrimony space for the last few years for only -- for the simple reason that we are a [ #3 player ] in matrimony and that we have only 15% share in the market. And it's hard for a #3 player in any market to make money. It's not a market where one player dominates like Naukri does in jobs. So what we have tried to do over the last 4, 5 years is gain at least in terms of profile share, traffic share, matchmaking share. The hope that revenue will follow once we gain share. So 4 years ago, we implemented a heavy sort of discounting, varying discounting strategy for a while that caught us a lot of traffic, that got us a lot of paid users. It result in more matches happening on the platform. It increased our share of matches and not necessarily revenue in this space.

But then competition caught on, we took them [ out ]. We also sort of supplemented and complemented it with more advertising to get more profiles, just registered to start. Strategy really good gains for about 5, 6, 7 quarters, but then competition caught on. They also upped their advertising spend. They also start discounting very aggressively. And then of course, COVID. And lately, the strategy has stopped working for us because everybody is doing the same thing. And we -- again, we are a #3 player.

Lately, what we've done is we've changed our strategy once again. We have, in fact, become more aggressive. Instead of giving heavy discounts, we've actually gone free for a lot of our paid services, right? Again, the intention is to, like I said, gain traffic share, gain profile share, enable more matchmaking on our platform. And hopefully, as a result, there'll be more bottom out, and we'll be able to sort of garner a larger share of the matrimony market.

Once that happens, then over a year or 2, you can sort of play around with monetization as well. So that's the idea. It's early days. We are happy with what we are seeing. Now as a result of this strategy, we will -- our revenues will take a beating for at least 2, 3, 4 quarters. But we are also hoping and that our marketing costs also come down. Early days, early days on that one. Because if Jeevansathi is free, that just differentiate ourselves from our competition. So let's see how this plays out over the next 2, 3, 4 quarters. We are hopeful and bullish that it will help us gain share. But again, it's also going to be a function of what happens in the market or how our competition react and so on and so forth. So fingers crossed, let's see how this plays out.

[Unknown Analyst]

Sure. So just if I can follow up on the last question. So the new AIF schemes you are setting up, so those will also have investments similar to how you had with the first AIF fund, like in similar areas like AI machine learning and those kind of areas?

[Unknown Executive]

Yes. So there's a follow-on point. Invest only in the emerging winners from Fund 1 that $100 million. There is Fund 2, which we'll basically invest in new companies which we've not invested earlier on the same strategy as Fund 1. And that wasn't an [indiscernible] right? That was more consumer net mobile app and so on, right, which, of course, you [indiscernible] but pure tech companies very few. And then there's Fund 2b, capital 2b, which is going to be a more product tech-ish kind of investment, will be more AI-like, but there will be some overlap, but we'll figure it out.

[Anand Bansal, executive]

Next question is from Aditya from Macquarie.

[Aditya Suresh, analyst]

So a few questions. First was more on kind of real estate and matrimony and all that stuff. I guess it's a long game here. You mentioned [ customer ] consolidation is the game. Last year, we had a 30 million loss. The year before, the loss is a bit lower than that. So I guess in terms of fiscal '23, maybe any thoughts in terms of how much losses you're willing to fund here at [ that upper bond ]? And then I had a few more questions.

[Hitesh Oberoi, executive]

There's no upper band. But in matrimony, like I said, we lost about INR 120 crores last year. So now we are hoping that it will sort of -- we'll sort of be able to make serious gains in terms of traffic share. And if we do that, then the rest of the stuff follows from there. Now whether we'll end up with INR 100 crore loss or INR 150 crores loss, it's difficult for me to say at this point in time. Because like I said, we've changed our model. It's very, very early days. We know revenue will take a hit for the next 3, 4 quarters. So we did INR 100 crores last year. We will see a drop at least for 2, 3 quarters. And then only if we gain market share and traffic share are able to figure out new ways of monetizing, we'll even go back.

We are also looking to cut our marketing spend slightly. But again, like I said, it will be one quarter a time, play around, experiment, see what happens and refine and fine-tune as we go along.

In real estate also, again, it's become very competitive. There are many more players in the market than was the case 3 years ago. Some of them are very heavily funded. Market is also showing signs of making a comeback. So again, it will be like one quarter a time. But needless to sort of say, we will sort of -- if we have to stay competitive, if we have to stay in the game, we will have to respond to competition. We cannot sort of let competition sort of take the game away from us if you want to stay in the game. And if that means taking extra losses for a couple of years, we have -- we should be prepared for it.

[Aditya Suresh, analyst]

Excellent answer, Hitesh. I guess the second question was more on your Naukri business right now. Here, clearly, in a kind of very strong demand environment, your margins have expanded as well. So in the prior year, your EBITDA margin is about 55%. I understand that there are levers which you can pull. But I guess, into fiscal '23, do you see downside to where your current margins are in Naukri?

[Hitesh Oberoi, executive]

Well, it depends on what happens to demand and revenue. See, if revenues continue to -- or billings continue to grow at 25%, 30% or more, I don't think margins, in fact, could improve from here on, right? On the other hand, if there is a slowdown in the second half of the year, if IT hiring takes a hit, if there's a recession and so on and so forth, it's hard for me. So if -- and -- but like I said, we manage quarter-by-quarter. So in the past, I've always said this at 15%, 20% growth also we can maintain our margins. But this year, we are being aggressive in terms of the sites that we are building out, in terms of investments in the adjacent verticals, right? I mentioned that most of them inside the company. They are not going to generate a lot of revenue in the short term, but we think it's important to keep investing in the -- to invest in them for the medium term. So we don't want to cut down on those investments. Recessions, in the past, we've seen normally don't last for more than 2 or 3 quarters.

[Aditya Suresh, analyst]

Yes. Can I ask one more question, please?

[Hitesh Oberoi, executive]

Yes.

[Aditya Suresh, analyst]

So just on your investee companies, maybe just a quick update there on some of your larger carrying value investments, whether it be ShopKirana, [ Vision ], et cetera? And also, I guess, related to the AIF, I mean, are you increasingly facing a more challenging environment in terms of capital and having to kind of go down the risk curve as you're kind of competing with some of the larger kind of VC firms.

[Sanjeev Bikhchandani, executive]

I'll take that. See, actually, what's happened last 2, 3 months is that people have been very careful, even other investors. So it's not as if it's a very competitive situation where we are having to fight to get into investments. That's not the case. I think everybody has been careful. And therefore, the risk is, one side, what is your current companies can't get the next rounds and you're dealing with that and you're figuring out how much cash they have, how much runway they have and so on? So if somebody's got 2 years of cash, it's -- he's okay. But if he's got 6 months of cash, you better start raising that up immediately and pretty quickly, right? So it's not -- it's really competitive in getting into deals right now. You should actually be very careful about deals you want to get into, right?

Now as far as ShopKirana and [ Vision ] are concerned, I mean, they're both reasonably capitalized right now. But yes, there will be more capital. They need [ at least a dollar ] more. But the business is scaling up nicely, but they are not making money. So obviously, the next few months or so, there will be -- we will have to do with capitalization options there.

[Anand Bansal, executive]

Next question is from Ravi Mehta from JPMorgan.

We'll take next question. The next question is Vivekanand from AMBIT Capital.

[Vivekanand Subbaraman, analyst]

First one is for Sanjeev. So we saw that in the past, Zomato and PB Fintech, you invested almost close to INR 1,000 crores in digital company. In fact in PB, you invested around INR 400 crores in one round itself. Now given the new AIF structure, does this imply that you're no longer able to cut such large checks in follow-on rounds for your investees?

[Sanjeev Bikhchandani, executive]

That is substantially correct. The truth is that we -- in our earlier sort of capital allocation in our portfolio, we cut some large checks which would never have passed muster actually in the AIF structure. Because even SEBI does not allow more than x amount of fund going into one company, right?

And you've got third-party capital now. And therefore, you've got to have -- you got to follow a long commercial prudence. Now it worked out for us in -- the fact that we have these large checks has given us this kind of outsized return, but it's also gaining risk. So therefore, yes, we will be more commercially prudent than we were earlier. And yes, we won't take bet the fund kind of investments, investing very large percentage of funding into any one company. So you can invest [indiscernible] in one company.

[Vivekanand Subbaraman, analyst]

Okay. That was very useful. Just one follow-up. So does this mean that for deploying the same amount of capital or perhaps now 3x the capital that we deployed in the first AIF, we will potentially have invested around 100 companies?

[Sanjeev Bikhchandani, executive]

No, it doesn't mean that. You see $100 million of the $325 million is going into a follow-on fund, which we'll only invest in the emerging winners of Fund 1. So that doesn't go to new companies at all, right? You will have $75 million and $150 million, $225 million -- yes, you will have maybe 2x of the companies, maybe...

[Vivekanand Subbaraman, analyst]

Okay. And some of these start-ups that are listed here, [indiscernible] Robotics, the IoT company, are these also earmarked for the deep tech AIF? Or is it part of the previous...

[Chintan Thakkar, executive]

For -- listen, we had a small sort of pool of capital we had put aside on the company balance sheet to invest in a very early state deep tech companies. And this is done through a subsidiary called Redstart, right? And this is -- those companies, 8, 10 of them, we have to figure out where to put that. That's to be worked out.

[Vivekanand Subbaraman, analyst]

Okay. Last one is for Hitesh. So now that Shiksha's billing is higher than that of Jeevansathi, does this mean that your business priorities also changed in tandem with the higher billing of Shiksha over Jeevansathi?

[Hitesh Oberoi, executive]

We, internally, we have a business unit structure. So every business has a business head, and they sort of make a case for their business. They build a business plan and then they execute. They're empowered to sort of hire people, invest in marketing, et cetera, et cetera.

Now while -- yes, of course, Shiksha has done well for the last 2 years, and we are going to be sort of increasing our investment in Shiksha going forward. Like I said, we are looking to invest in the study abroad sort of section in the vertical in Shiksha. And so -- but in Jeevansathi, it's been one bad year. We expect it to grow at 15%, 20%. It only grew 3%, 4%. But now we have, again, sort of reworked that strategy. Now if this strategy starts to yield results, we continue that [indiscernible].

[Anand Bansal, executive]

Next question is from Mukul Garg from Motilal Oswal.

[Mukul Garg, analyst]

Hitesh, a couple of questions from my side. The first one was around the -- just a bit of a clarification on the recruitment side. There is a difference of about INR 75 crores between recruitment and Naukri billing. Is this purely due to iimjobs? And can you just help break out how much [indiscernible]

[Hitesh Oberoi, executive]

I just want to clarify recruitment for us includes Quadrangle. It also includes Naukri Gulf. It also includes -- of course, we work against almost 0 revenue from JobHai and -- but it also includes those verticals. It includes AmbitionBox. It includes the candidate services business in Info Edge. And now I don't know whether there are -- Chintan, can you just clarify whether -- what we have reported includes iimjobs and Zwayam and DoSelect as well? Or...

[Chintan Thakkar, executive]

The recruitment solutions numbers include iimjobs number because that merger is complete. It won't include Zwayam and DoSelect. I think those numbers we have given out separate. But broadly, that then explains that Naukri is just one subset of recruitment solution. Of course, that's a big part of it. But there are other more small brands also, and that's everything kind of accumulates into the overall recruitment solution numbers.

[Mukul Garg, analyst]

Chintan, is it fair to assume that there is no major change in last few quarters because of these smaller businesses their overall share in the recruitment billing or has something grown quite rapidly?

[Hitesh Oberoi, executive]

Actually, I mean I don't think we give out the number, but I've called Naukri business, regional business grew the fastest more than anything else.

[Mukul Garg, analyst]

Right. And also, the second part was a follow-up to earlier question on 99acres, Hitesh. If you look at the paid listing drop, is it fair to assume that this was partially due to market share loss as you increase prices? And if you look at the number of paid listing, it is probably lowest in recent history, excluding obviously the Q1 disruption. I had to go back all the way to 2015 to get a lower number. And also, if you can just kind of break it up. What's the impact more on the rental side versus the developer side, how is the mix shaping up?

[Hitesh Oberoi, executive]

So the fall in paid listing, like I said, is -- can be attributed to 2, 3 things. One is, of course, higher prices and, therefore, brokers putting up fewer of the same listings. Two is the market being a little better than it used to be. Three, maybe there is more -- like I mentioned earlier, there's more competitive intensity as well.

Yes, we have lost some customers at the bottom because that was designed in the beginning, at least, because a lot of the customers are paying us -- money so we didn't feel it sort of important to sort of service them. Also, there was a slowdown, so many sort of our clients went out of business, especially in the first half of last year. They all come slowly and steadily, they're all coming back. But -- so let's see what happens going forward.

[Mukul Garg, analyst]

Understood. The third was on the -- while obviously, there are concerns on the IT side going forward in FY '23. But how should we think about the non-IT portion, the remaining 50% of the Naukri business that went through a deep compression in the last 2 years? How should we see the growth, especially compared to what it was in FY '20 pre pandemic? Is it something which can really see a fast catch-up next year?

[Hitesh Oberoi, executive]

So again, the non-IT sort of piece I would break up into 2 parts. One is the sectors like travel, tourism, hospitality, retail, which were massively impacted by the pandemic. And then there are the other non-IT sectors like education, pharmaceutics, FMCG, et cetera. So we've seen -- so the second sort of segment, that we start that seeing hiring in these sectors pick up in the second half of last year itself. So some of these companies are hiring very aggressively towards the second half of last year. But lately, what we are seeing is the other segment also come back, the hospitality, travel and tourism, retail, these kind of sort of sectors because they've started opening up post pandemic. Now I suspect -- and what we are seeing on the ground, in fact, even in our company is, until last year, we were worried about tech attrition. And therefore, we have to give massive increases to people in our product development sort of organization. But this year, we are having to sort of pay a lot more to people in functions like customer service and operations and sales and finance and accounts as well because demand for these professionals is also [indiscernible]

Now will this continue for another 2 quarters, 4 quarters, 1 quarter? It's hard for me to say. Things are opening up. Many of these companies had laid off people, they shut, they had downsized over the last 2, 3 years. They are beginning to see -- hire once again for -- and that is resulting in higher attrition. In other sectors as well, not just in these sectors because -- but for how long will this continue, it's hard for me to say.

[Mukul Garg, analyst]

That's clear.

[Hitesh Oberoi, executive]

I want to make as many of these people -- sort of many of these workers also went back home, right? And a lot of them are working from home. As companies encourage them to get back to work, that could also lead to some attrition in some places.

[Mukul Garg, analyst]

Sure. If I can ask one question to some Sanjeev, if he's there. The -- if you look at the last fund raise, there was a discussion about the scaling or acquisition in the non-Naukri vertical in the stand-alone entity. This funding drying up, and obviously, peers are now struggling, can that be an opportunity for direct acquisition because that will not be possible through AIF.

[Sanjeev Bikhchandani, executive]

No. So the acquisition -- but there's enough money on the balance sheet. I'll let Hitesh answer that question because that really comes to him.

[Hitesh Oberoi, executive]

No, no, see, like when we raised money also, we have said that we are looking to, of course, invest in our operating businesses in adjacent areas, too. We said we would sort of do more investing in companies outside, also do some tuck-in acquisitions.

And the third thing we said was is that we are sort of also hoping to sort of do a big acquisition at some point in time in the next 2, 3 years. But big acquisitions, as we have learned, are one, of course, they're opportunistic. There are just a handful of companies you can acquire. And what also happened over the last 2, 3 years is that valuation sort of went out of whack. Now -- and therefore, everything looked very, very pricey. Could things on this front change going forward? Maybe, maybe not. Time will tell.

But big acquisitions will -- you'd probably see probably do one or maybe one in the next couple of years if we get opportunity. Hard to predict what's going to happen on that one. We'll continue to do the smaller ones. We'll continue to sort of invest in our internal businesses. Those are easier.

[Mukul Garg, analyst]

Sure, that's fair. Best of luck for 2022.

[Anand Bansal, executive]

Next question is from Swapnil from JM Financial.

[Swapnil Potdukhe, analyst]

So a couple of them. First one, Naukri. So given that we have a high billings base this year, I would presume your revenue would grow significantly well next year. And you mentioned that you will be doing some investments within Naukri. So how should we think about margins for Naukri in the near term at least, if you could give some sense on that.

[Hitesh Oberoi, executive]

The investments are not going to be very, very substantial. Like I said, we look at things quarter-on-quarter. We make some investments, see results. If it's working, going to scale up. So we will continue to invest in our newer verticals. But if revenue growth continues to be -- if billing growth continues to be solid -- and by solid, I don't mean 60%, 70%, which is what we got last year. By solid, I mean even if you are able to grow at 25%, 30% this year, I think our margins should continue to be very, very healthy.

[Swapnil Potdukhe, analyst]

Okay. Good. And second question is on Jeevansathi. You mentioned that you're not charging the customers as a change in strategy. Now should we assume that, theoretically speaking, can the billings go to 0? Or is it like -- is it for partial you're charging some customers and not the other -- and just on that, like what would be your fixed expenses in Jeevansathi? What would the variable part of it so that -- that will hit this model?

[Hitesh Oberoi, executive]

No, no, you're right. Theoretically, billings can go to 0 because a substantial part of what we were sort of charging for is now free. Having said so, there are some value-added services that are still paid, and we expect revenues to fall substantially, but not go to 0. But we were -- maybe a 30%, 40% correction is very likely -- could happen, dropping revenue could happen easily. We are hoping, like I said, in the long run, to make it up through more registration, more matchmaking, more activity, more engagement on the platform, but that's a big if.

We billed about -- our revenue in Jeevansathi was INR 100 crores last year. We spent about INR 220 crores. We lost INR 120 crores at the EBITDA level. I think at least half of this, if not more, was advertising and marketing costs. So the other costs would have been maybe closer to INR 80 crores, INR 90 crores, but I can -- we can get back to you the exact number.

[Anand Bansal, executive]

Next question is from Vijit Jain from Citi.

[Vijit Jain, analyst]

I have just 2 questions. One, with study abroad, Hitesh, is there a change in approach with that given that talk about it as a new initiative versus other classified business? Is there going to be more marketplace type of offerings, more value-added services, if you will, that you can monetize effectively? That's one.

And my second question is on the IT, in the recruitment business. Is there an overlap between the kind of resumes you think are sought by the new age Internet companies, so to say, the ones where a lot of funding has been raised in the last couple few years and the conventional IT services companies, that is the core of your business? Those are the 2 questions.

[Hitesh Oberoi, executive]

So listen, so the study abroad, things are of an experiment. And in the past, we've flirted with these assisted services in Naukri, have a higher service which is if -- we get INR 370 crores revenue. We have assisted services in 99acres. We have an assisted [indiscernible] on the whole hog on and said, "Okay. We'll do the transaction."

Shiksha study abroad is actually the first as far as we are concerned, where we're actually saying we actually get paid on closure. We will send these kids overseas to these universities. We will handle them, counsel them, get them a visa and so on and so forth. Now we've been surprised by the fact that we've been able to execute reasonably well given that this is not a skill we had in the company so far. Now if it scales up nicely, if it scales up nicely and be able to develop this new competency, then over time we could experiment in other verticals as well.

I've already mentioned PeakShift. So there's an experiment going on inside the company where we're looking at an end-to-end sort of play in premium tech hiring. But it's early days of PeakShift. PeakShift still need to develop the platform. They haven't even started monetizing as well as yet. So let's see how this plays out, but it could open up a new sort of avenues for the company in the medium term for these 1 or 2 experiments, if these 1 or 2 experiments will succeed.

As far as -- as far as your second question goes, is there a big overlap between the kind of people IT services companies hire and these start-ups which are heavily funded hire? I don't think so. Because IT services companies have traditionally hired from Tier 2, Tier 3 campuses. They're starting salaries on campus are more like INR 3 lakhs, INR 4 lakhs, INR 5 lakhs, INR 6 lakhs per annum. And they hire in thousands and in hundreds of thousands, in fact.

On the other hand, these innovative tech start-ups which are heavily funded don't hire as many people as IT services companies, but they like to hire sort of from Tier 1 campuses. They're starting salaries are often double or triple what IT services companies are for on-campus. And they hire very few numbers. So between -- I think all the start-ups put together, if you were to look at the total tech workforce, it will be smaller than perhaps [ Info ] or InfoSys, right? So that's the -- so they're not big in terms of size, but they hire quality. They hire from more premium -- premium -- premier institutions and they pay a lot more.

[Anand Bansal, executive]

Next question is from [ Mishi Bandari ] from Nomura.

[Unknown Analyst]

Hitesh, I just had one basic question. If I look at your billing, which is an indicator of your market size, your recruitment is almost around 1,450-odd crore kind of business. What do you think could be the bucket size for your remaining 3 key verticals, whether you look at real estate or education or matrimony in next 5 years' time?

[Hitesh Oberoi, executive]

So actually, recruitment has become a very large market. We do 1,450 crores in this thing, then do a few hundred crores. Then there are recruitment firms, and there is referral hiring. So I won't be surprised if companies are spending at least $1 billion or close to that much on the -- if not more. And this is not including the cost of their internal HR recruitment team and so on, right? So that's one.

Now as far as the other verticals go, the 99acres now, if you look at it, depends on how we define the market. So if you just look at the advertising market for real estate, right, 10 years ago or 14 -- 12, 14 years ago, this would do 2,500 crores, right? And -- but all of it used to go to newspapers and holdings and so on.

Then the real estate advertising market shrunk because real estate went through a rough time, starting with the demonetization, GST, NBFC crisis, COVID, et cetera, et cetera, et cetera. The market actually shrunk to maybe 2/3 of the size, even though after time -- so 10 years later, the market was maybe 2/3 the size. Now the nature of the advertising spend has, of course, changed. Most of it now goes to online, right? It doesn't go to newspapers and holdings anymore.

But within online, also, a large part of it now goes to Google and Facebook, right? So there is Google and Facebook. And then there are the real estate portals. And then there's newspaper advertising. So if you were to look at the spend on real estate portals and Facebook and Google today, it's probably close to INR 1,000 crores, if not more, already, right? And the real estate is now entering a growth phase. And then there is the prioritizing, et cetera, which would slowly, again, keep migrating to online. So it's very likely that 10 years from now the real estate advertising market in India, right, could be INR 5,000 crores, INR 7,000 crores, who knows, right?

And this does not include transaction, it does not include brokerage, it doesn't include some -- so over time, some of these sort of markets will also be up for grabs, depending on what models people develop and so on, right? So it's not a tiny market by any standard. The -- it's just that it was like screwed for the last 7, 8 to 10 years, right?

If you look at matrimony, now again, it depends on how we define market. If you look at traditional matrimony, which is basically community-based, like Jeevansathi, Shaadi, and Bharat Matrimony today itself, that market is close to $100 million, right, but growing at maybe 7% to 10% on annual. The reason -- one reason why it's $100 million and why even real estate is INR 1,000 crores, INR 1,500, INR 2,000 crores because a lot of competition. What happens around competition is that prices are driven down. Unlike what you're seeing in recruitment. In recruitment, because there is not a lot of competition, we are able to command the price we deserve to get in that vertical. Here, because of the competition in both matrimony and real estate, there is aggressive discounting from all players, which results to lower realizations.

Now if you were to this matrimony market add the dating market, right, because the dating market did not exist a few years ago, and the dating market also evolve on this casual dating, which is Tinder. And then there is serious dating, which is IA, which is something we invested in. And that market is also now -- I don't have the numbers, the exact numbers, but maybe it's a INR 250 crores per year market already, right? And growing much faster. So these are not a small market by any standard. And over the next 5, 10 years, it could become fairly large, especially -- and especially if there is consolidation.

[Unknown Analyst]

Got it. My second question, Hitesh, that now that our jobs classified business called Naukri is cash cow and we are a clear dominant market share, has it occurred to you that we should actually [indiscernible]

[Sanjeev Bikhchandani, executive]

Sorry. May I take that? Cash cow is not the correct characterization of Naukri. It is growing very fast. So it's highly profitable, growing very fast. I do not know what you call it. But it doesn't fit into [indiscernible]

[Hitesh Oberoi, executive]

Let's call it a star.

[Sanjeev Bikhchandani, executive]

[indiscernible] So it does fit into our traditional [indiscernible] but yes. Sorry. Yes.

[Unknown Analyst]

No problem. I didn't mean it's growing slow by any standard. What I meant that it's a fast-growing engine, spewing cash. Has it ever occurred to you that you should go up the value chain and probably start targeting more premium? I know the investments in iimjobs and all of that, but more like probably like a LinkedIn kind of approach, way to start building communities. And it becomes probably one of its own kind given the wide network you have. And I think the effects of network can actually be realized very quickly over there, any thoughts there will be helpful.

[Hitesh Oberoi, executive]

See, what we've seen over time is that it's very hard for any two player to succeed in new market, right? So you have to have a differentiated strategy. You have to have a considered offering. If you try and do what somebody else is doing, and if that somebody else is already very strong, very powerful, has a lot of resources, it's unlikely that it would succeed, which is why we are doing what we're doing in iimjobs. We have to have differentiated ourselves.

Now -- so should we do another professional networking site? I don't think whether that approach will work. But what are we doing, we're doing iimjobs, we're doing vertical sites. We are also experimenting with the portal called hirist in which is premium tech hiring. We are trying to do big shift, which is well, like I said, we are floating with the idea of doing end-to-end sort of transactions, end-to-end platform using technology, maybe in a small area.

So maybe the right approach to premium hiring or to sort of enter that market is this niche sort of vertical approach as opposed to trying to build another sort of network to compete head on with Microsoft. So that's our thinking at this point in time. But like I said, some of these things change. And -- see an aggressive start-up, which is sort of likely to succeed in this space and is making great progress, then none of this matter.

[Anand Bansal, executive]

Next question is from [ Atman Ajmera ] from Nordea Assets.

[Unknown Analyst]

This is [ Atman ] from Nordea. Firstly, congratulations on Naukri's performance. I mean business has done really well over the last 2 years. Business is a lot bigger and virtually a flat employee base. Clear testament to the sort of scalability of this -- of the platform. My question is more on 99acres and Jeevansathi. Most questions have been answered, but just one question I was curious about is, so what are you really optimizing for when you incentivize your business heads? So are they going after traffic share? Is someone in the organization penalized for a high marketing spend? How do you measure a successful outcome in these 2 businesses when the market is what it is, which are some things you can do internally as well? So what you're really incentivizing your business heads for what's a good outcome?

[Hitesh Oberoi, executive]

So the #1 thing we focus on in almost every vertical we operate in is our traffic, right? How many users sort of end up on our platform. What is the common amount of time they spend on our platform, how engaged are they with our platform. So that's the number one thing. So whether it's Naukri, 99acres or Jeevansathi to track what's happening, right?

The number two thing we focus on because we are a matchmaking platform is matchmaking, right? So you may get -- you can get a lot of traffic, but they bounce, and it may not spend too much time. It may not end up sort of -- in Naukri, they may not end up buying the right jobs. They're not short-listed, they not get hired. In Jeevansathi, they were not finding the right sort of matches, and they may sort of just disengage after a while. So the number two thing we sort of focus on in on our verticals -- almost all of our verticals is matchmaking, how many matches are we able to enable through our platform. And we, again, like I said, we have portal analytics, et cetera, et cetera, to report stuff like this on a daily basis.

The number three thing and which we focus on is traffic share, right, which is how we do versus our competition. So our -- may be growing, our visitors may be growing 20% per annum, our matchmaking maybe growing 20% per annum, competition is growing 50%, right? So because as you know, in the Internet space, it's often [ any call ], especially in the kind of markets we operate. And if you're not strong contender or if you're not a strong #2 or a #1 player, it's very, very hard after. This is why I mentioned recently just on the -- I mean that this new approach in Jeevansathi. Because what we did 3 years ago are working for us -- for us for some time, gain share, we gained in terms of the number of matches you are enabling and so on. But then competition followed and then we are now sort of forced to do things being very differently we have to do to win share. So these are the top 3.

And then, of course, there's revenue. Because the proof of the pudding ultimately is in the eating. And often, monetization is not easy and to be able to think of smart ways to monetize. Because you can do all this and -- but if your monetization model is not in sync with what you're doing, then you may not be able to reap the benefits of all these changes that you made to your platform, right? So we have to constantly sort of reinvent or reimagine monetization also on all our platforms.

So these are the 4 sort of big things we focus on. Like I said, in the long run, traffic share is the most important, but also -- because you may have very high traffic share, but if you're a tiny market, you don't have too many visitors, it doesn't matter, right? And in the end, the proof of the pudding is in the eating, so you have to monetize, and you have to be able to command the right price, especially if you are a leader because that is what ultimately show good margins.

[Unknown Analyst]

Right. Just a follow-up. A lot of the things you mentioned can be achieved through marketing spend, right? I mean you can invest higher to get traffic. So are the business heads given x budget, this is what you spend and do your best with kind in terms of traffic? Or is this sort of is there a pool that the business heads are fighting for? And was there a core constant [ combat ] saying we need more to sort of grow traffic?

[Hitesh Oberoi, executive]

Yes and no. See, marketing is not a panacea for all ills. So in the sense that if you spend more money on marketing and your competition also start spending more money on marketing, you're back to square one, right? So marketing works up to a point, it works, especially when competition doesn't respond. It often does not work. It goes to grow the market, expand the market, but it does not work beyond a point to get your share, right, if your competition is also as aggressive as you are.

Now therefore, a lot of the focus is also on doing smart things on the platform. So in many -- some of our verticals we need to invest more in operations. Like I said, we need to invest in smart algorithms to enable good matchmaking. We have a data science team. They sort of constantly sort of focus on that. We sometimes need to launch new features and get into newer areas, sort of just get a higher share of the funnel at the top. And so it's a combination of sales. Marketing is not the -- I mean marketing is required from time to time, and it's important, especially if competition with -- advertising were not to be able to respond. But it's not as if you can get all the results you want only from marketing.

Now is there a budget? Is there -- so like I said, every business prepares -- it has a business head to prepare business plans. They survey the environment. They understand what competition is doing. They understand -- we have a lot of fast data on how effective marketing has been for us, right? Because the good thing about Internet marketing is that you can track everything. You know what happens when you spend last time. So they look at all that and then they sort of arrive at a plan. And they prepare a budget, which is then sort of approved. Now that -- budget is not cast in stone. Because in our space, unlike in mature setups, where things won't see too much in every month, right, earlier, it used to be only because of competition and because of start-ups, but now it is also the environment, which changes every quarter. So once we are in our budget, they implement it quarter-by-quarter and review and evaluate and then -- that's how it works.

[Unknown Analyst]

Understood, understood. Just to wrap this up, would -- let's say if this quarterly loss was at INR 35 crores was or let's say INR 100 crores this quarter, hypothetically, would someone be penalized in the organization for that?

[Hitesh Oberoi, executive]

So they want -- I mean, it's unlikely that, that has happened because we track, like I said, on the daily basis. So we have data coming in on revenue, on costs, on all this on a daily basis. At the end of month, there's a review. At the end of the second month, also will be reviewed. At the end of the quarter, there'll be a review. So it's not -- when I say quarter-by-quarter, it is -- I mean, at my level, it's quarter-by-quarter. But at the business heads and the sales heads and the product heads, reviews are every week. And they will be required.

[Anand Bansal, executive]

So that was the last question for the day. We may wait for some time. If there are any more questions, please raise your hand. Vivek, no more questions, so we may conclude the call.

[Vivek Aggarwal, executive]

Thanks, everyone. On behalf of Info Edge, we conclude this conference. Thank you, and you may now disconnect your lines.

[Hitesh Oberoi, executive]

Thank you, everyone.

[Sanjeev Bikhchandani, executive]

Bye.

[Hitesh Oberoi, executive]

Bye.