Our real estate & matrimonial businesses will play out in next 5-7 years, says Hitesh Oberoi of Info Edge

Even as we are seeing so much volatility and big sell off in tech and investors ending their love affair with tech stocks, a good performance has come in from Info Edge India. When it comes to Naukri, what is the larger message for attrition? Is high wage inflation here to stay?
That’s what it looks like at least in the IT space. We have delivered stellar results for the last almost three or four quarters and we have seen attrition rates climb up with almost all our customers. I have not seen a market like this in over 15 years. The last time we saw a market like this may be just before we went public. Then clients used to talk about IT professionals resigning via SMSes. Today they are resigning on whatsapp. That is the only difference. Otherwise it is a hot market and hopefully it will continue to stay this way.

Also we are also hoping that the non-IT market will bounce back because the Omicron wave so far has not had any impact on business and if all goes back to normal quickly, then hopefully the non-IT companies will also start hiring. They have been relatively quiet for the last few quarters but hopefully that action in that segment will also start soon.

When we talk about IT here, it is not the same kind of tech companies that we talk about in the US. Are you expecting any impact of the selloff that is taking place globally?
Of course. If tech stocks correct in the US and if liquidity dries up, then it will have an impact on valuations and multiples of companies in India – both in the public and in the private market. Having said that, multiple stories are playing out. There is a liquidity story, there is an interest rate story and there is also a story of performance. So, if companies which continue to perform will continue to do well in my view, investors will continue to back them and then the other story which I am waiting to see play out is whether India will get back to 7% plus GDP growth or not.

When we went into Covid, India had slowed down considerably. GDP growth had become 4-4.5%-5% but now there are signs that the economy may be booming once again. If India goes back to 7-8% GDP growth for the next few years, India will be a different story altogether.

You are getting business from the traditional IT companies which are also growing. Second, you are also getting business from the start-ups and that is where the client talent acquisition is also very large and where have you hit the gold pot?
About 50% of our revenues are now from IT related positions and openings and most of these are from IT services companies. These are the companies which employ millions of people. We have maybe 8,000 IT services companies in some shape or form, MNC development centres, captives, Indian IT services companies, large Indian companies, mid sized companies, smaller companies. Between them they employ millions of people. Attrition rates in these companies have gone up over the last few quarters, their business is booming and this is a result of the massive digitisation wave which is playing out globally.

Even all non-IT companies now want to digitise and that is resulting in more and more demand for IT talent not just overseas but in India as well. In the Indian market also, demand from Indian start-ups is growing but they are still a very tiny part of our portfolio. They do not hire as many people as the IT services companies. What we are also seeing now in the local market is the non-IT companies are beginning to hire tech talent.

So traditional banks, insurance companies and consulting firms want to grow their IT presence and increasingly they are also looking to hire IT professionals through us. Our IT business is fairly diversified. We have the local non-IT companies wanting to hire IT folks.

Among your other operating businesses, Policybazaar, Zomato are listed. There is nothing in the pipeline which will add substantially to your other income. Could there be a drought and a vacuum for the next couple of quarters now?
So if the question is whether we have any company in our portfolio which is likely to go public in the next two quarters, the answer is no. I do not see any company in our portfolio going public for a while. Going public is a journey. Companies have to reach a certain size and scale and after that the market has to be supportive and then the process to go public takes a few quarters.

We do not see any big companies. There are some late stage investments we have made and some of those companies may decide to go public at some point in time but we do not see any early stage investments of the type we made in Zomato and Policybazaar, going public in the next few quarters.

Of course, Zomato and Policybazaar could do well. They are listed, they are operating companies and if they do well and their stock price goes up, then that will have an impact on our stock price but we really cannot predict how they are going to do. We continue to make strategic investments in the jobs and career space. We have invested in a company called Coding Ninja; we are shareholders in a company called NoPaperForms; we are investors in a real estate company for Broker Network. We will continue to sort of make small acquisitions.

Last year, we acquired a few companies in the job space – Swayam, Do Select. Before that we have acquired iimjobs. These activities and investments will continue but we do not have any big company in our portfolio which is likely to go public in the next one or two quarters.

What you have achieved with Naukri, you have not achieved with your other two real estate and matrimonial businesses. If you use the same manpower, talent and your attention to just your core business, perhaps the gains would be very large?
In the real estate business, we are a strong player and we have been a leader for a very long time. You are absolutely right in saying that these businesses have not scaled up as one would have liked them to scale up over a period of time but they are not bad businesses. Unfortunately, the real estate sector has been through a lot and even last quarter towards the end, our billing was impacted because of Omicron.

Every time we have a Covid wave, house hunting comes to a halt. People do not want to buy houses sitting at home, unlike job seekers who are happy to interview sitting at home and companies are happy to hire them without meeting them. That does not unfortunately happen in the real estate market. Also the real estate market is a little more competitive than the job market. We are a clear leader in jobs and there is a lot more competition in matrimonial and real estate, but these are interesting big categories to be in. The game is not over and these stories will continue to play out over the next five-seven years.