Info Edge India, India related Q1 2024 results conference call. As a reminder, all participant lines will be on listen-only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please raise your hand on your screen. Please note that this call is being recorded. From the management side, we have Mr. Sanjeev Bikhchandani, Founder and Chief Vice Chairman, Mr. Hitesh Oberoi, Co-Promoter and Managing Director, Mr. Chintan Thakkar, Chief Financial Officer and Whole-Time Director. 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. I refer to slide number two of investor presentations for detailed disclaimer. I would like to hand over the call to Mr. Hitesh Oberoi for his opening remarks. Thank you, and over to you, Hitesh. Thank you, Vivek, good evening, everyone, and welcome to our Q1 2024 earnings call. As always, we'll start with an update on standalone financials, and then talk about the external environment, and then cover each business financials in detail. The audited financial statements and other schedules on segmental billing, revenues, et cetera, along with the data sheet, have been uploaded on our website, infoedge.in. Moving on to our standalone financial results. Revenue in Q1 stood at INR 584.3 crore, a year-on-year growth of 15.1%. Overall billings in Q1 stood at INR 523 crore, a nominal drop of 0.2% year-on-year. Billings and revenues, along with acquired businesses, Zwayam and DoSelect for the quarter, stood at INR 539 crore and INR 600 crore respectively, registering a year-on-year growth of 0.4% and 15.2% respectively. Operating expenses for the quarter were INR 375.4 crore, a year-on-year growth of 5.6%, operating profit for the quarter stood at INR 208.9 crore versus INR 152.3 crore last year, a year-on-year growth of 37.2%. Operating profit margins for the quarter stood at 35.8%, compared to 30% for the same quarter last year. Operating profit, including acquired businesses, stood at INR 210 crore, a year-on-year increase of 35.8%. Cash from operations for the quarter stood at INR 144.7 crore compared to INR 164.4 crore- INR 164.5 crore in Q1 2023, down 12% year-on-year. Therefore, sales revenues stood at INR 958.8 crore as of 30th of June, 2023, versus INR 825.4 crore as of 30th of June, 2022, a year-on-year growth of 16.2%. The cash balance of Info Edge, including the wholly-owned subsidiaries, stands at INR 3,562 crore as of 30th of June, 2023, versus INR 3,439 crore as of 30th of June, 2022. Talking about our recruitment business, we continue to witness a challenging environment, especially for IT hiring. Slow growth and, you know, reduced discretionary spend for our IT customers, has led to weaker prioritization during the quarter. We also strong headwind, faced strong headwinds from our re-recruitment consultants, especially the ones who hire for IT companies. The Naukri I-IT, Naukri JobSpeak Index is on a declining trend. Index for the month of July was down 8% sequentially and 19% year-on-year. While for Q1 of 2024, the index is down 3% year-on-year. The current state of real estate market, characterized by low inventory, stable interest rates, and high affordability, and price corrections in residential rentals continue to rise and are seen in most metro markets. Moving on to the quarterly financials of recruitment business. In Q1 of 2024, the recruitment segment billings were down 4.2% year-on-year, and stood at INR 397.5 crores, while revenue was INR 446.6 crores. Sorry, INR 446.4 crores, a year-on-year growth of 15.3%. Operating profit stood at INR 266.5 crores, a year-on-year growth of 17% from Q1 of last year. Margins stood at 59% against 58.2% last year. Cash from operations for recruitment during the quarter stood at INR 206.1 crores, as compared to INR 235.4 crores in Q1 of last year. Billings for Naukri India for the quarter were down 7% year-on-year and stood at INR 319.4 crore, while revenue for the quarter stood at INR 302.3 crore, a year-on-year growth of 13.9% for Naukri India. Our recruitment segment billing, including acquired businesses for the quarter, were down 3.3% year-on-year and stood at INR 413.5 crore. Hiring from core IT clients continues to pose a challenge to billing growth. However, the business witness positive momentum in a few pockets in this space, especially captive centers. Non-IT businesses maintained reasonable growth momentum during the quarter, with growth in hiring supported by manufacturing, BFSI, healthcare, retail, hospitality, and infrastructure. While we maintained our pricing levels during the quarter, delayed renewal and volume reduction led to billing contraction. With longer sales cycles and hiring being predominantly backfill, sales teams focused on ensuring timely renewal. On the job seeker side, engagement on the platform was high during the quarter, with 6% growth in active user base, 7% growth in daily users, and 20% growth in daily modifications or CVs. Moving on to the real estate business, 99acres. Billings in Q1 grew by 20% year-on-year and stood at INR 73.4 crore, while revenue grew from INR 66.3 crore in Q1 to INR 82.7 crore in Q1 of 2024, a year-on-year growth of 24.6%. Operating loss for the quarter stood at INR 22.5 crore, against a loss of INR 38 crore reported in the same quarter of last year. The business reported a cash outflow from operations of INR 40 crore for the quarter against an outflow of INR 46.6 crore in the same quarter last year. The billing growth in 99acres for the last two or three quarters reflects, has been good and reflects the positive sentiment in the underlying real estate market. The billing growth is also backed by strong traction on, of user activity on the platform. The traffic on the platform increased mid-teen, and the responses on the platform increased over 25%. The user actions on the platform indicate a strong demand environment for through for 2024 as well. The quarter also witnessed increase in the number of brokers and owner clients on the platform. The number of new projects and live listings are also on an increasing trend. Our listing realization continued to increase year-on-year on the back of price hikes, improved response rates, and increased value add, value add for our customers. 99acres will continue to invest on platform experience, differentiated content, client delivery, and marketing to generate more traffic and leads for our customers. In the Shiksha business in Q1, billings stood at INR 33.3 crore, a year-on-year growth of 9.8%, while revenue stood at INR 35.8 crore, a year-on-year growth of 14.6%. The business incurred an operating loss of INR 1 crore in the quarter, against a profit of INR 5.3 crore reported in Q1 of last year. The cash from operations for the quarter stood at INR 0.30 crore against an inflow of INR 5.3 crores in Q1 of last year. While there was healthy growth in platform traffic and student responses, clients reported a delayed pickup in conversion of student inquiries into applications and admissions. We continue to make long-term investments in the study abroad business and strengthening our platform, improving our counseling services in this space. In the Jeevansathi business, billings in Q1 grew by 6.4% year-on-year to INR 18.8 crores, and revenue declined by 15.3% year-on-year to INR 19.4 crores. The operating loss for the quarter stood at INR 18 crores against a loss of INR 28.7 crores last year. Cash outflow from operations for the quarter stood at INR 21.1 crore, against an outflow of INR 49.8 crore in Q1 of last year. New, the new products to monetize increased traffic from free chat has shown some positive results, business plans to continue with this strategy for the next few quarters. Spend on marketing were further moderated during the quarter. The spends are down 29% sequentially and 48% year-on-year. Intense competition in the category has continued as multiple players try to vie for market share in this category. As far as consolidated financial highlights go, at the consolidated level, the net sales for the company stood at INR 625.9 crores versus INR 547.3 crores in Q1 of last year. For the consolidated entity at the total comprehensive income level, there is a gain of INR 3,001.9 crores versus a loss of INR 3,342 crores for the corresponding previous quarter, ending in June 30, 2023. Consolidated PBT stood at INR 216.7 crores in Q1 versus INR 339.4 crores in Q1 of last year. Thank you, and we are now ready to take any questions. Thank you, Hitesh. We'll now begin Q&A session. Anyone who wishes to ask question may raise hand on the screen. We'll state your name and announce you in the question queue. The first question we have from Vimal from Alchemy Capital Management. Vimal, go ahead and ask your question. Yeah, thank you for the opportunity, sir. My question, Hitesh, is on there is a lot of movement on GCC. A lot of companies, MNCs, are setting up Global Capability Centers in India. That opportunity really seems to be large, looking at, you know, the kind of talent that is available in India, et cetera. So how are we sort of participating over here? Do we see a chance of, you know, erasing some of the weakness in your normal IT services with, you know, participation in GCC sector in India? Thanks. We have a lot of, lot of captive, captives or centers are our clients, and we've been working with them for many years. You know, of course, if there is growth, in hiring from captives, then, you know, Non-IT will benefit as well. However, captive hiring as a percentage of, total sort of IT hiring is still a small fraction. IT, the IT sector employs over five, six million workers, you know, while captives are maybe 15%, 20% of that. So it'll be, you know, difficult for, to compensate for the loss in business from IT services companies, you know, from by just sort of focusing on captives. We continue to, you know, like I said, they're all, they are all our customers. The hope is that the non-IT sector will continue to do better, going forward, and that's about half our business as well. Let's see how this plays out. Thanks. Thanks a lot, and all the best. Hey, hi. Can you hear me? Yes, we can hear you. Yeah, go ahead, Nikhil. Yeah. Yeah. Hitesh, just want to understand regarding the billing, which declined 4%. Why, why? Which segment basically led to this decline? Even IT is under pressure since last three quarters, right? Given now we are finally in a negative trajectory, was it higher than expected decline in IT or non-IT actually was not able to more than compensate for the decline in IT, so some slowdown even in non-IT side. Yeah. IT hiring has been slow for a few quarters now, and, you know, there is no sort of-- it's not clear whether the slowdown in IT hiring has bottomed out. You know, we, we don't know whether we've hit the trough as yet. You know, the, the job seeking there for IT continues to trend south. On the non, non-IT side, Q1 was okay, but, you know, July, well, you know, job seek for even some of the non-IT sectors were not so good. Non-IT hiring also slowed down a bit in July, right? We don't know whether it's because of, you know, the economy slowing down, whether it's, you know, just because of the rains or something else. Things will get clearer, you know, in, in a few weeks. You know, did IT hiring slow down more than expected? Well, you know, anecdotally, you know, a lot of companies have been telling us that, you know, we grew by over 80% last year for a few quarters. Anecdotally, what we've been hearing, what companies have been telling us is that now they have overhired, attrition rates have come down and, you know, their bench has grown, and it'll take maybe a quarter or two before things start going back to normal. Very helpful. Second part is what you mentioned about the pricing, broadly stable on YY basis, I believe. Last quarter, we were seeing some increase in pricing, especially in non-IT. Is it like, on blended level, the pricing in IT decline, which basically more than compensate or offset the benefit in non-IT? I don't have, you know, data on that, but we'll run it back to you. Sure. The last one is on the delayed renewal. Have you seen that basically closing ultimately in the month of July? Are we seeing some increase in delays or decision-making now after the last quarter? That always happens. When the market slows down, companies take longer to close deals. They have more time to negotiate. They're not under pressure to hire. They negotiate harder. You know, they sometimes buy for shorter periods. They won't buy for a year. These are, you know, they, they downgrade in terms of the kind of product they buy. This is normal during any slowdown. What we are witnessing in IT is a, is a slowdown. I mean, you know, I'm, I'm sure all this is happening in the market. Sure. Thanks a lot. That's all from my side, and good luck for, for IT. Thank you. Thank you, Nikhil. The next question is from Jaggi Sharaya from Advanced Security. Jaggi, go ahead with your question. hey. Hi, Hitesh. Can you hear me? Yeah, go ahead, Jaggi. Yeah. Hitesh, my question was regards to 99acres, the robust performance that we've been witnessing quarter on quarter, and somewhere, in your initial comments, you also talked about reduction in the operating cash burn of the vertical from INR 46 to INR 43. I just want to get some color around what has led to this reduction in the cash burn. Is it totally driven by top line increase, or there has been some cutback on the marketing spends as well? Three, four things. One, you know, of course, top line is, growth is healthy, so we've been growing at 20% plus for the, for a couple of quarters now. You know, at the same time, manpower cost are under control. It's not like we're adding people. At the same time, you know, we've also optimized our marketing spend, without compromising on anything. Our marketing expenditure in 99acres has trended south, but at the same time, you know, we've managed to get more users on the platform. We're generating more responses, we're getting more inquiries, and that has helped us to sort of raise prices. You know, and, you know, because of the real estate market is buoyant, we are adding more customers as well. It's mix of everything. You know, market is, is good, and we've been executing well, and that's resulted in top line going up and, cost, sort of remaining in control. That's why the burn has gone down substantially. Any plans of... Just a follow-up. Any plans of kickstarting the marketing campaign once again, given that there are some, you know, high-profile cricket matches in, around the corner? Any plans around that? You know, we, you know, sort of plan quarter by quarter, and a lot depends on what we are seeing in the market and, you know, how sort of competition is behaving in this space. Hard for me to say how this will play out going forward. If the market remains solid, and if we continue to grow at 25% or so in, you know, year-on-year, we'll at least maintain this spend. I mean, will we increase it going forward? Time will tell. I mean, it's hard, hard for me to say right now. Has the competitive intensity kind of, what, normalized or intensified? Just how do we understand the competitive environment in the real estate? No, it's very competitive. There are a lot of players out there, and they're all spending money. You know, a good time, and, you know, a lot of our... So while there are portals and there are startups, you know, a lot of our... The real competition in this space, if you ask me today, so for, for us, it's from the Googles and Facebooks of the world, which, you know, get a large chunk of advertising dollars from developers and large sort of channel partners. Yes, the space remains competitive. There is a lot of action in the space. Thanks, Hitesh Oberoi. All right, sir. Thank you. Thanks, Jaggi. The next question from Sachin from Bank of America. Sachin, go ahead and ask your question. Thanks, Vivek. I, I have, three questions. You know, first question, just wanted to understand a bit more about the mix shift, happening towards, non-IT. Is it, is it fair to assume that if IT continues to remain the way it is, you know, one could see a sort of a mix shift more towards non-IT, and just wanted to understand the implications on that, in terms of billing and, you know, margins and so on, so forth? See, about 50% of our business is indexed to IT hiring. If IT hiring continues to be slow and if non-IT hiring remains buoyant, then of course, this mix could change over the next few months. May not change by a huge number, but, you know, from 50/50 it could become 48/52, 47/53, that kind of stuff. You know, now a lot will depend on what happens in the long run. If IT hiring continues to be slow and non-IT and the economy, the, the domestic economy continues to do well, then of course the mix could change even more. Margins may not get impacted that much because, you know, it's not as if... The IT business is a little more profitable, but it's not as if the shift is going to be too much from IT to non-IT. Got it. you know, on the long-term point, you know, if we take a three to five-year view, general thoughts about Generative AI and the potential impact of that on IT hiring? We say there are two schools of thought in this. One view is that every time there's a new technology, then you create more opportunities to build new products and create new businesses, and the services business around every technology, new technology is always larger than the technology business around that technology. If that happens this time around as well, and if, and if, you know, you know, Generative AI and the advances in machine learning and AI in general, you know, result in sort of, more opportunity for Indian, IT companies and for, or for, you know, or if there is more outsourcing for jobs to India because people are hard to find in the U.S. and every company on the U.S. wants to leverage Generative AI, and they start opening their cashiers and so on and so forth. It's, of course, it could mean, you know, it could result in, more hiring than normal in the Indian, IT market. The other view is that, you know, Generative AI will, could make, you know, developers more efficient, and therefore there, you know, it, it may make them more productive, and therefore fewer desk developers may be required for the same work, going forward. Let's see how this plays out. I mean, in general, you know, when there's new sort of... When there are changes in technology, then people with new skills are required, and that creates opportunity and that creates movements, and in the market, and that's good for us. Provided, you know, the legacy business doesn't get hurt too much. Got it. Pretty clear. Last question is on, you know, clearly, for the last six to nine months, we are seeing a funding winter. Just wanted to understand the implications on that, on, you know, the kind of investment opportunities you guys are seeing. Clearly in India to date, we are not seeing massive down rounds, and, you know, there's ample capital around Series A, you know, on that, that level. Just wanted to understand your thoughts out there? Sanjeev, you wanna take that? Can you repeat the question, please? Sorry. Yeah. Sanjeev, the question was more from point of view about the funding winter and the environment, in, in India. What are we seeing right now at Series A and Series B and, you know, any good opportunities for you? No, no, there are plenty of good opportunities. There are. The deal flow remains strong. The valuations are more reasonable, round sizes are, are smaller. At the same time, we are taking our time and being cautious, simply because there's a new risk, and, and that new risk is, will this company be able to get a next round of funding with other investors participating or not? That's something... Therefore, are we convinced enough that if you have to do next two or three rounds solo in this company, then we will win Zomato. Do we have that conviction? Then, do we have the money? So on. Therefore, we're being very cautious. Having said that, we think this is a good time to invest. If you recall, we invested in Policybazaar in 2008, just before it even went down. We invested in Zomato in 2010, during the global financial crisis. We believe this because, because our investment time horizon is seven years, eight years, ten years, but actually it's longer from the balance sheet, because, you know, it's, it's 17 years, I mean, it's, it's 15 years since we went into Policybazaar, we're still there. It's 13 years since we went into Zomato, we're still there. You know, so, so if you have a long-term time horizon, we believe this is a good time to invest, but be careful. Got it. Thank you. Thank you, Sachin. Next question is from Mohit, from Nuvama. Mohit, go ahead and ask your question. Hi. Thank you, Vivek. Yeah, go ahead, Mohit. Hi, thanks for the opportunity. My question is on, you know, the Jeevansathi and the 99acres business. Now, you know, your ad spends have definitely come down, but, you know, you have multiple times your voice spending on the competitor density very high. Jeevansathi, you said you have got more users, right? If you look at the major competitors, the realizations have come down there also. Can you give us a sense on, you know, how do you look at these ad spends going forward? Will you, will there be an, whether be a case where you will increase them further, you know, to gain more market share? Is it that competitive intensity has, you know, tapered down a bit? Can you give some sense on that? Yeah. You know, right now, as things stand today, it's unlikely that these ad spends will go up in a hurry. You know, our model has changed, and we are now a premium platform, and we offer that for free, and we are using that, because this feature to sort of try to get more users on the platform. We've seen, you know, serious growth over the last few quarters. I think the real challenge that even is now, is to now see how we can monetize these users, who have joined the platform over the last few quarters, and that's what we're working on right now. I, we don't expect the competitive intensity in this space to go up in a hurry, but who knows what could happen three quarters from now? Hitesh, sir, can you say that now you have been able to gain market share and the users are capturing the users? Yeah. Certainly on the user side, you know, we gain traffic share, we gain user share. The, the challenge is to really monetize these, you know, additional users we've been able to get on the platform. We got them because, you know, we offer stuff for free, and that's good, and it helps us cut down, bring down the marketing cost. Now we need to work on, you know, we need to develop products, and we need to sort of figure out how to monetize this new user base better. Sure. That's more helpful. Thank you so much. Okay. Thanks, Mohit. Next question from Vivek, from Ambit Capital. Please go ahead and ask your question. Thank you for the opportunity. Two questions. One, Hitesh, I think, couple of quarters ago, you mentioned that, if the domestic economy does well and non-IT hiring remains buoyant, you, you might consider increasing your distribution and sales network to cater to this demand. Is that something you pursued or, or are you seeing any, any indications that the hiring is becoming more and more broad-based, given that, previously you had spoken about sectors like hospitality, travel, and others that may have more, distributed hiring than, say, IT, which is concentrated in a few cities? That's question one, and, based on this answer, I'll, I'll ask my second one. Yeah. Yeah, yeah. You know, you're right. You know, non-IT, the non-IT market is broader, and you have a lot of non-IT companies in a lot of cities. We already operate in more than 40 cities. It's very likely that the number of cities we have typical offices in will go up over the next year or two. We are already seeing more activity in smaller towns, than was the case, maybe two or three years ago. So very likely that Naukri, you know, will have field offices in 60, 70, 80 cities over the next year or two. We are pushing hard on that front. It's not actually gonna hire a lot of people. These new offices start with one or two sales people each, and these sales people become profitable within a few months. In the, in the larger cities, where we already have offices and we already have sales safety, we are unlikely to hire more sales people to sell existing products. But on the new products which we've launched over the last, you know, couple of years, over the last few years, we may hire some people on the ground to push them harder. Products like Zwayam and iimjobs and others. Let's see how this plays out. You know, you know, now, if the market continues to be slow for a long time, then of course, we'll figure out a way to utilize the people we have more efficiently, in the markets where we are present. Right now, the hope is that, you know, the slowdown is temporary and, you know, these things will bounce back in, in a couple of quarters. Let's see how this plays out. Okay. Thanks. That's helpful. Just one extension to this question. Since you mentioned that the growth seems to be broad-based, and you will perhaps open physical offices in more cities to cater to this demands for non-IT talent, is 99acres also seeing something similar, or is it, is the action only concentrated in the top five, five to eight cities? See, the top eight cities are a big part of the business, so most of the business does come from the top seven, eight cities in both Naukri and 99acres. We are seeing more activity, even in 99acres, in smaller towns, and it is very likely that even 99acres will open more offices going forward and expand to other cities. The contribution of these cities to revenue in the short term is not really large, but I think strategically important to cover each and every part of the country. You know, over a tree, four, five-year period, revenue from these cities will and can become significant. Okay. The other question I have is on the recruitment acquisitions that you have done, right? Zwayam, DoSelect, the more recent ones, right? Coding Ninjas. These acquisitions seem to be focused largely on the IT verticals. Is, is that, is that assessment correct, or, are these solutions can offer these solutions to customers across verticals? See, some of these can be... You know, like, iimjobs is actually meant for non-IT hiring. Zwayam is a recruitment management system, can be used for both IT and non-IT companies. You know, Coding Ninjas, we don't- we, we haven't acquired the business, but we own 51%. That's more IT skilling, upskilling for IT. But, you know, the IT companies actually employ a lot of people, and they have larger budgets, so a lot of the customers for many of these products end up being IT services companies. They are not the only customers.... But often a lot of the customers end up being the large IT services or large industry IT companies, for the simple reason they hire a lot of people, they have big budgets, they have large workforces, and they need, you know, these solutions more than the other companies. But if the non-IT market continues to be buoyant for the next few years, if this is the start of a new cycle, if India continues to grow at 5.5%, 6% even, for the next few years, then, you know, I mean, we already have a lot of large non-IT customers. It's not as if we don't have them, but hopefully the number will on the non-IT side will also grow over time. Okay. Hitesh, I think you had spoken a couple of quarters ago about Job Hai, where it started from Delhi, but I think you wanted to expand it into new markets as well, right? Is there something, something that we should know about that business now, that you perhaps are taking it to more customers? In terms of business development, are you working with any of the new companies that are setting up manufacturing facilities, perhaps, capitalizing on the PLI schemes and, and maybe giving them any bespoke solutions through Job Hai? Any, any updates that you can offer on the gray collar, workforce, for Job Hai? Yeah. You're right. Job Hai, you know, we started Delhi, now we've taken it to many more cities. It's growing nicely for us. The number of jobs are growing, the number of users are growing, engagement on the platform is growing. You know, the number of recruiters on the platform is also growing. We're very happy with the progress. We haven't started monetizing aggressively as yet. Strategically, this is very important for us, from a long-term standpoint. It's unlikely that it will generate a lot of revenue in a hurry. The unit economics will have to be worked out since, you know, the, it's not so easy to make money in the gray-collar space. We'll have to keep our co- cost per acquisition low. We have to figure out how to monetize. From a five-year, seven-year perspective, I think, it's, it's a market we can't afford to ignore. It also helps us keep, keep competition at bay. We don't want to sort of keep any doors open for which competition can enter and, and then sort of get into our main business. We keep investing in Job Hai. The big category for Job Hai, where we are seeing a lot of traction right now, are categories like delivery boys, categories like, you know, credit card sales, telly sales, for domestic sort of customers, domestic businesses, not overseas call centers. You know, S MEs, you know, where, you know, we have a few hundred thousand, tens of thousands of SMEs on the platform, and they need to hire a few people each, every year. you know, these are the hotter categories. These are categories where there is a lot of attrition, and there's a lot of demand for talent. The manufacturing piece is very tiny for us right now, both in Naukri and in JobHai. Okay, thanks. The last question I'll ask is on 99acres. It seems that you have turned a corner there with respect to traffic share as well as growth. Apart from the market buoyancy that is currently manifesting and perhaps offering you a tailwind, what is going right for you in 99acres? Competitively, what is changing there? Or is it just too early to comment? No. See, I think, it's... 1, I think the market has been supportive. See, for a long time real estate was, you know, in, in deep trouble, I mean, starting with Demonetization and then RERA, then GST, and NBFC crisis, COVID. You know, prices were sort of flattish. In fact, in real terms, prices had actually went down. The appetite spend in the space, fell. You, you know, builders sitting on lots of inventories, a lot of projects, were, took time to get completed. You know, the market was in trouble for a long time. I think I, we have turned, we have got to, gotten to a point where it's looking good now, you know, you know, the, there's more demand. The industry has sort of, restructured. There are more, there are bigger developers, better capitalized developers. RERA are being enforced strictly. You know, so interest rates are reasonable. Incomes have gone up. After COVID, there is more demand for bigger homes. In the industry, sort of, I mean, we don't want the prices to go up by too much because real estate cannot become unaffordable, but otherwise it looks good. At the same time, you know, the other thing that happened is that developers and builders and channel partners and brokers have become savvier about using the digital medium. They're getting... They, they've realized that, you know, the, they, they can, their, their customers are all online, and therefore they need to be online, and therefore, spend is also moving from offline media to online media, ad spend. One, ad spend is growing, and two, ad spend, ad spend is beginning to move from offline to online. Three, I think we've also been executing well. We've seen a surge in inquiries on our platform. We've seen more visitors on our platform. You know, we are seeing. You know, we've done a lot of good work on putting out, interesting real estate content, that is locality reviews or society reviews or transaction prices. Real estate is a very opaque market, and there's no information available. people sort of need to visit platforms 99acres and to understand what's happening to prices, what's happening to supply, what's happening to various other things in the market. we are very happy with the way our team has also executed over the last two quarters. fingers crossed, summer does not make a summer, does not a summer make, like they say. let's see if this continues for the next few quarters, then I'll be sort of I'll feel more confident about staying optimistic. Okay, got it. Thanks a lot for the elaborate commentary. All the best. Thanks, Vivek. The next question is from Swapneel, from JM Financial. Swapneel, go ahead and ask your question. Hi. Thanks for the opportunity. For the first question is to Hitesh, and that's on the commentary that we had in the previous quarter, where the intonation was that if the economic growth, let's say 6%-7%, our non-IT business could grow 20%-25%. Yeah. if I hear you correctly, you mentioned, that July was a soft quarter, soft month, sorry. Soft month, yeah. Yeah. Yeah, what has changed suddenly in the last, you know, two to three months, that, that, for us, to say that, things are looking soft now, especially in the non-IT? Yeah, actually, you know, it's... I mean, July numbers surprised us, the job peak numbers. We are digging deeper to understand what could have happened. Was it that there was there's some shift in seasonality? Was it because of the rains, or is it because we, you know, because of our, our post-COVID, the non-IT markets opened up last year, and there was a surge in hiring, so is it a base effect in, in, in some way? Yes, long term, you know, we continue to maintain that if the Indian economy continues to grow at 6% or more per annum, then it is possible to grow at 20%+ in India. Just, a continuation to that, you mentioned that, there could be an impact of the base effect also. Can you just give us an understanding of, like, how the, how things, moved, between, let's say, last, two, three quarters? How... it would be good if you can just give a sense, and give, compare it with pre-COVID things, how things used to be and now, how, and how, the base moved then. Look, see, pre-COVID, whenever we see 5%-6% GDP growth, Naukri, the Naukri business used to grow at 15%-20% per annum. Last year, last year Q1, last year Q1, billing growth was 80% in Naukri, right? Even Q2, billing growth was very high, 55%-60%. You know, so the base is high, and then, of course, it started moderating towards the second half. By Q4, I think we were down to 15%. 15%. You know, so there could be some base effect here at work. And, you know, and the base effect is a, was a result of, you know, you know, the market opening up post-COVID, right? I mean, and suddenly there was a lot of demand. Yeah, you had the great resignation, you had people coming back to work, et cetera, et cetera, so that led to a lot of attrition. Things have stabilized to, to some extent since then. You know, good-- I mean, in the long run, like I said, you know, once we go back to 5% growth and once we are over and done with all these COVID and post-COVID effects, you know, growth should stabilize at 15%-20%, depending on how fast the economy grows. Right. My second question is with respect to unique clients that you report on a quarter-to-quarter basis. This quarter, again, you had a decent growth in, sequential growth in terms of unique clients. The majority of the decline that has happened in your business, that seems to have come from the real estate or, or people not renewing at the same rate that they were, you know, during the year. Can you just give some sense, like, how should one see these trends going forward as well, and how to make out, make sense out of these things? whereas your unique clients continue to grow, but real estate have, would have come down significantly, much more, compared to this. Yeah. Look, see, in real estate, we added more customers, what happens is, when you add new customers, we added a lot of new customers, you know, they don't buy, you know, long-duration products to start with. They don't sort of buy high-end products to start with. They test out the platforms. They get a good response. They upgrade. We upsell to them. Normally, you know, when you get in a lot of new customers, your pools fall or tend to remain flattish because, unless you take a serious price hike, because the new customers sort of, the customer mix changes, towards more new customers in the mix, and new customers don't spend too much money to start with. In a slowdown, you know, what you see is pressure on prices, you see pressure on even a new customer addition, you see pressure on renewals. In a, in a serious slowdown, what you get to see is, you know, pricing falls, volume falls, the number of customers also, and customer acquisition also starts to fall. That's how, that's the nature of the beast, yeah, in both the, you know, real estate and Naukri. In Naukri, we, you know, I, I haven't sort of looked at the numbers very closely, but I suspect, you know, we may have lost some customers in, in the IT space. You know, a lot of startups may have sort of stopped hiring. Stuff like that would have happened because of the market slowing down. On the non-IT side, you know, we continue to add new customers. Got it, got it, Hitesh. Thanks a lot for the opportunity. Good day. Thanks, Swapneel. The next question is from Raghav, from Citi. Raghav, go ahead and ask your question. Yeah. Hi, Hitesh. My question is on the non-IT side. The realizations in non-IT seem to be much lower versus the IT. Any pockets where, like BFSI, where you can take price hikes? Because we have seen some of the banks report higher attrition and wage increases in 1Q. Any comments on the realizations over here? ... We are not looking to take an aggressive price hike at this point in time. In general, you know, like I was saying before this, if the market heats up and if companies are, start hiring a lot of people, if attrition rates go up, then what we've seen in the past is that companies negotiate a lot less, therefore, our realized prices, price goes up. They also, you know, hire more sort of, you know, they want more volume, and they also upgrade to higher end products. In the end, you know, hiring cost is a small cost, for many of these companies. In a slowdown, because they're not in a hurry, they negotiate harder, everything sort of, you know, while in a, in a, in a good economy, they are constantly under pressure to hire, and they don't mind paying 10% more to Naukri at that time. We are not looking to up our rate cards right now, but in general, if the market is hot, you end up sort of discounting a lot less in the market. Okay. Just a follow-up question on the non-IT side. Some of the CapEx heavy sectors might slow down. Do you think they might slow down hiring before the general elections? Because in general, we see that some industries, you know, just pull- push back hiring or CapEx to post-election clarity. Any comments on that? I have no idea how this worked in, in the past. At least what we have seen is that, actually, government spend more in at election time, and that results in higher demand for a lot of products. While hiring in some sectors may slow down, like you said, because I'm just spending money on CapEx, on CapEx, and so I, I don't know how it works. In general, you know, there is more money sort of spent at election time, and that results in more demand for goods and services, and that will result in hiring in other sectors, for all you know. I don't know how this plays out. I don't think it's going to have any material impact on, on, on the business. Okay. Can I just add to that? Yeah. See, if the, if the co- if a company has got dependent on government contracts, right? There is a serious possibility of the government changing, and therefore contract highs are not coming through, being canceled, a company will be cautious. If, you know, it's not dependent on government contracts, or if the company is confident that the government will not change, I, I don't see it making a difference. You know, that's, that's what we don't know, obviously. Okay, sir. Thank you. Thanks, Raghav. The next question is from Rajiv Joshi from Aditya. Rajiv, go ahead and ask your question. Hi, am I audible? Yeah. Go ahead, Rajiv. Yes. Thank you for doing this. I have two questions on behalf of Aditya Group. First is on renewals. What is the nature of discussions that you're having, with clients as you renew these contracts? You briefly touched upon this, but would you like to highlight anything in particular that is different this time? Sorry, can you say that again? Yeah. On the nature of discussions that you're having as you renew your contracts, so is there anything particular that you'd like to highlight that is different this time? No, no. See, what happened last year was, see, for the quarter-quarter, there was surge in demand for IT talent because of post-COVID, you know, massive sort of increase in digitalization worldwide. There was a scramble for IT talent, and attrition rates went sky high and salaries went sky high. Talent, talented tech people were hard to get. Our business also flourished as a result. Revenue more than doubled, profits maybe tripled over the last couple of years. Then there was a sudden sort of slowdown for whatever reason. Attrition rates, I think, have been gone, gone back to where they were pre-COVID. Suddenly, companies realized that they had overhired, right? Because demand suddenly vanished. What is happening right now, as we speak, is companies are getting... Their bench size has grown to is now higher than what they want, is higher than what they want it to be, and therefore, they're sort of cut down on hiring, and they're waiting for some natural attrition so that they go back to the numbers they are comfortable with. Then again. Hopefully, you know, demand will also come back in a couple of quarters, and then they will start hiring once again. That's what companies are telling us right now, mainly. Right. With cycles, there'll be slightly more discipline on pricing or maybe tenure of contracts. Anything in particular that comes up more? No, it's like this. See, they have, their, their hiring requirements have gone down. Therefore, you know, they negotiate harder, you know, they need fewer licenses. That results in sort of... You know, they're not growing anymore, they're not adding any new headcount. That results in lower realization in the end. Some of them, sometimes they may say, "Listen, we're not hiring for the next one or two months, so, you know, come back after a month, come back after two months, two months." That, that happens during, during slowdown. It happens every time. Okay. Understood. Second one is on billing. Given the decline, how should we think about marketing and other OpEx? Long term, we continue to be bullish on the Indian market. We think, you know, and that's what we see for the last few years. These slowdowns only last for more than two, three, four quarters, and business always goes back to normal. We don't want to cut any long-term investments. We, we spend- we're currently spending maybe INR 20-25 crore a quarter on new businesses, you know, like Job Hai and AmbitionBox, et cetera, where we don't generate any revenue, right? We are spending money on marketing, doesn't move the needle in the short term for Naukri, but I think, we think it's important, you know, from a long-term standpoint. Unless and until the, the slowdown is very prolonged and deep, then these investments will continue. Okay. That's helpful. Thank you. Thanks, Rajiv. Next question from Sarang, from RW Investments. Sarang, go ahead and ask your question. Hi, sir. Thank you for the opportunity. I have three questions. My first question is to Mr. Sanjeev. Is it possible to give the breakup of other income on console level, and how this would pan out through the year? Sure. Mostly, you know, treasury income, maybe the other, the other income part. Yeah. If you want a more detailed breakup, you know, I can get back to you. Sure, sure, sure. My second question is to Hitesh sir. You said the major chunk of revenue is contributed by top 7 to 8. Is it possible to put an approx% figure on maybe Naukri side and [MaxMucur]? Sorry, you said major tops? Top, the revenue contribution. Revenue to A cities. Yeah. Yeah, we, we don't give that breakup, but it's a large chunk. Okay. Okay. Delhi, Bombay, Bangalore, Chennai, Hyderabad, Pune, these are our big markets. Sure. Okay. My third question is to, Sanjeev sir. Is it possible to share your experience with learning from investing in 4B Networks, if you're allowed to speak about it? Okay. Sarang, you want to take that, or Hitesh you want to take that, or Sanjeev? I can take it if you want. You can take it. Matter, matter, matter is under arbitration, but Sanjeev, you could take it. Yeah. I've said this, you know, to others who asked it. Look, sometimes you make mistakes, right? Investors do wrong. We have, in the past, you know, lost money on several companies, but we've made money on some, and we made some big money on some. Overall, we're okay. Yes, you know, INR 4 billion was a mistake. I think we, we have to admit it, and we can't write off INR 276 crore or how much is written off. Actually, how much is written off? Yeah, INR 2,288 crore. We don't want to act really cool and say it wasn't a mistake. It was a mistake. Right. Are any other steps you are taking to ensure this doesn't happen internally? Yeah, yeah. In fact, we discussed that about briefly. We are, you know, we have already reviewed internally, and we are taking. We have taken some steps. We're taking more steps. We continue to discuss more than, you know, on how do we, do we need to change some of our diligence practices, tighten it up? What are signals, indicators, and red flags that emerge during conversations with founders that, you know, there may be a problem here? How we deal with other situations in case anything comes up, which, thankfully so far has not, in terms of fraud. Companies go under. Fraud is a different thing. Sure, sir. Thank you. Thank you so much. All the best to you. Thank you, Sarang. Next question from Ashish Chopra from Goldman Sachs. Ashish, go ahead and ask the question. No, sorry. My question has been answered. Thank you. Okay. Thanks, Ashish. next question from Vivek, it may be a follow-up question. Vivek, go ahead and ask your question, from Ambit Capital. Thank you for the follow-up opportunity. Yeah, two questions. This is to Sanjeev. With Info Edge Ventures getting a new investor for its funds, is there any change in the objective or the conditions as far as these three funds are being run, whether it's governance or fund life or objectives of capital deployment? That's question one. Yeah. Secondly, Sanjeev, the comment you made on the round sizes, getting smaller, valuations getting more reasonable. Now, you have two kinds of funds, right? One is funds set out for new companies where you want to be the first set, and the other one is a follow-on fund, which is basically identifying the winners from the previous AIF and doubling down on them. Yeah. Where are you finding it easier to deploy money in the current context? If, if you could just help us understand, how, how the follow-on fund is doing versus, or how, how your process is for the follow-on fund versus the funds where you are investing in new companies. Fund one is more or less done, okay? Because first checks will be deployed. There will, there will be no, there's unlikely to be a new company coming into fund one. The follow-on fund only looks at the companies of fund one and figures out where to go how much, you know, and prospective winners, we, we back them more and more now. It is fund two and capital two B, which are actually scouting new companies and investing in them, and that is where we are saying we're finding it easier, or we're finding the valuations lower, the round size is smaller, and we are being careful, right? you know, the, and as far as the first question is concerned, though, we, we do not have any change in mandate. Our strategy remains the same. Well, for the most part, I won't say always, we will have some sort of popular capital for growth and late stage, but that will be a small fraction of the total fund. Most of the money, most of those companies we invest in, we will try to be early and first check or second check in them, then double down on, you know, and then invest further in, in the ones that we find good. The strategy has not changed. Yes, there will be a certain pocket in both funds where we will do slightly different investments. In the first fund, we did, you know, for instance, first from regional profit, that was an investment. The bulk of the money went into the, or the bulk of the companies, most of the companies or our companies, were the first check we did. Okay, this is helpful. Just one follow-up with respect to the, the, the follow-on fund that you have, right? Yeah. Here, are, are you looking to be the only check for the subsequent rounds, or is it, are you open to getting, you know, the winners, getting external investors to come in? In fact, we, we, we like to say that we want to get external investors and be some of that. I see. Okay, that's, that's very clear. Thank you. Yeah. Thanks, Vivek. That's now the last question of the day. No, there's one question in the chat box. Just one minute. Uh. That question is for Hitesh. Hitesh, how should we see the trend in the recruitment business for a longer period of time? Since we are the dominant player, we have a large database, and we get already trend how the sector would behave in coming time. Long term, we, we've always said, you know, recruiter is indexed to GDP growth. If the Indian economy continues to grow at 5%, 6% per annum, it should be possible to grow at 15%, 20% per annum in the Naukri business. In the core Naukri business. Around the core Naukri business, we are trying to add more dozen vessels. We, we acquired iimjobs, we've got Zwayam, we've got Iris, we've got DoSelect. So we're trying to create new sort of opportunity for us. Job Hai is, you know, a big opportunity in the long run, but from a 5-10-year time frame, not a, not in a one-two-year time frame. The blue-collar segment has now become recent. I mean, there are tens of, you know, maybe a few millions of people who work in some of the sectors I mentioned earlier, delivery workers, as counter sales people, as, you know, tele salespeople and, and in, in salons and in restaurants, and lots of other sort of small SMEs and small businesses. Long term, this also is a big opportunity, but, you know, we have to... We're working on the unit economics, and it will take some time to figure this out. The core Naukri platform indexed to the economy, depending on economic growth, it could, it can grow at between 15%-25% or 10%-25%, depending on where India ends up. We are adding the adjacent sort of verticals around the core Naukri business. you know, they are small today, but hopefully they'll grow faster than core Naukri over time, but they're a small part of the revenue today. Coding Ninjas, et cetera, are separate, where there we're trying to monetize job seekers and not, not recruiters. That's a B2C model, not a, a B2B model. In the long run, over a 5, 7, 10-year time frame, blue collars markets could, could start making sense. That's, that's the game plan, that's the strategy for Naukri. Which sectors are likely to do well going forward? you know, if, if the government continues to invest in infrastructure, you know, if, well, the real estate market continues to be buoyant, if it's the start of a new cycle, then, you know, we did not see much action in spaces like cement, metals, heavy engineering, oil and gas, construction, real estate, you know, heavy engineering, you know, infrastructure type of sectors for a long time. At one point in time, you know, this sector was bigger than IT for us. But over time, over the last 10, 15 years, because of the twin balance sheet problem, because of whatever reason, the share of all these sectors and the overall Naukri revenue base, revenue, went down from maybe 30% to 15% or 14%. If the infra sort of investments take off and hopefully more jobs will be created for, you know, civil engineers, mechanical engineers, electrical engineers, site engineers, site supervisors, et cetera, et cetera, et cetera, and this, this kind of hiring may look up. Manufacturing, very, very tiny for us today. Very tiny. It doesn't move the needle for us. If the manufacturing sector takes off, you know, manufacturing hiring perhaps is less than maybe 5% or 7% or 8% of all hiring on Naukri today. If this, you know, government is trying very hard with the PLI scheme and with other schemes. If manufacturing India takes off, then of course, you know, this could become big for us. Again, it's unlikely to happen in the next 12-18 months. This could play out over the next five, 10 years. Other services, that's where the action is. I mean, BFSI, insurance, healthcare, retail, travel, tourism, hospitality, these sectors have been strong and will continue to be strong. IT captives, we expect them to be okay. Domestic IT hiring, we expect it to be fine. Startup hiring, hopefully will come back, in a year or so. IT service, Indian IT services companies, fingers crossed. Let's see how it plays out over the next few quarters. Yeah, Hitesh, two more questions, I think both are for you. One is from Sanjay Lada. Is AmbitionBox profitable, and can you share its business model and the growth prospects going forward? The AmbitionBox, we are not monetizing, but we are using it to get more traffic. You know, it's a content play right now. It's deeply integrated with Naukri, and it's helping us, one, keep job storage base, and it's now because it's launched in India in terms of traffic. Two, it's, it's helping us get new users to the platform, because there are enough users who visit AmbitionBox to get information on salary, to prepare for interviews, to, you know, read reviews and on companies and so on and so forth. We are not monetizing it, but the traffic we get through AmbitionBox, of course, gets monetized through the revenue models that we have in Naukri. Okay. The next question is from Amish Itandari: Can you please talk about the competitive intensity in the core recruitment platform advertising? Has it changed or remains status quo? Thank you. Status quo. Not, not much change there. Not much change there. LinkedIn and us continue to be the two big players, and, of course, LinkedIn is slightly different from us in terms of the segments we operate in. Not much action otherwise. No change. Okay. The third question comes back to you. This is from Karan Mukherjee. How have the discussions with investors been, investors such as FIIs and DIIs? Are you seeing more interest from new investors as of now? I think the better way to really kind of respond to this is that now that results are out, we need to see what the real, you know, how the market is receiving the numbers, and is there a real movement in terms of FII or DII. Otherwise, you know, we have not seen any kind of a different trend, you know, recently, as compared to what it was past. I think the, it's the pattern of holding remains, you know, more or less same. Just, you know, every time there's a result, then we are watching, you know, how the pattern changes. There are no more questions in the chat box. Yeah. There is one other question again from Vivek, from Ambit Capital. Vivek, go ahead and ask your question. Thank you so much for the multiple follow-ups. Hitesh, since you spoke today extensively about Job Hai, I, I want you to spend some time on competition there. Who is your real competition? Is it Apna or is it the staffing companies? And, and secondly, as far as the segment goes, does it have similar network effects as your, your core Naukri, or, or is it very different because it's part offline? I, I, I just want you to spend some time on the details as far as Job Hai is concerned. You've been running this business for a while now, so that's why. Yeah. There are, there are a bunch of companies who try to handle blue-collar hiring, gray-collar hiring, and it's been the case for years now. Over a period of time, we've seen at least 15, 20 companies take a shot at this space. You have Apna. Apna, of course, has been at it. Then there's Work India, and there are a bunch of others. There's Quikr, there's, you know, there was [Roar Axel], which was very active until some time back. A lot of companies have tried, but, you know, the space, as I said, it's, it's still small. But at least we are getting more users on the platform now, so there is, there is more usage. There are, more employees also trying out Job Hai, which was not the case. These kind, you know, because I think the economy has become more digital than it was a few years ago, and people have become very savvy about using their smartphones. Of course, we are doing a lot of product work. The Job Hai platform is very local. It's totally, it's very, it's mobile first, and it's increasingly becoming more and more vernacular. Of course, the product is also evolving to sort of meet the needs of this segment. All kinds of players are trying, but it's early days. In the long run, will there be network effects in the space? I'm sure there will be a network effect in this space as well. It'll... The market is right now, very, very early. Very, very early. It'll take a few years for things to mature and stabilize in this space. Okay, Hitesh, do you see staffing companies as competitors or collaborators? Collaborators. They'll be clients. Okay. Okay, great. Thank you, and all the best. That was the last question we had for the day. Hitesh, we will conclude the call now. Yeah, sure. Thanks, everyone. On behalf of Naukri, we conclude this call. Thank you. You, you may disconnect your lines now. Thank you. Thank you, everyone. Thank you.