Info Edge (India) shares experienced a notable decline after reporting subdued recruitment billing growth for the fourth quarter of FY26, prompting brokerages to revise their outlook and target prices amidst prevailing macroeconomic uncertainties.
The stock of Info Edge (India) fell 2.9 per cent at close on Thursday after the company reported muted growth in recruitment billings for the fourth quarter (January-March/Q4) of 2025-26.
Brokerages expect its operating performance to be impacted, with margins likely to contract on a sequential basis. The stock has declined 25 per cent since the start of calendar year 2026, weighed down by weak hiring trends, uncertainty in the information technology sector, and concerns that higher marketing spends might pressure margins.
Any rerating at current valuations would require a meaningful improvement in the macroeconomic (macro) environment.
At current levels, the stock trades at about 55x its 2026-27 (FY27) earnings estimates.
Q4 performance is the near-term trigger for the stock.
In a pre-quarter business update, the company reported standalone billings (across segments) growth of 7.4 per cent year-on-year (Y-o-Y), lower than the 11.8 per cent growth recorded in the third quarter (October-December/Q3).
Growth was also affected by a high base of 18.4 per cent last year.
Its largest segment, recruitment (Naukri), which accounts for over 80 per cent of overall billings, reported growth of 9.5 per cent Y-o-Y.
This was lower than the 11 per cent Y-o-Y growth recorded in both the second quarter (July-September/Q2) and Q3.
The moderation in growth, according to the company, was due to a combination of broader macro uncertainty and geopolitical headwinds, which had a direct impact on the Naukri Gulf business.
This segment had otherwise delivered strong growth of 20 per cent Y-o-Y in the first nine months of the year.
These factors also weighed on billings in the business-to-business (India recruitment) segment during the quarter, it added.
JM Financial Research has a "reduce" rating on the stock with a target price of Rs 1,050 per share.
According to the brokerage, macro pressures and a high base weighed on recruitment trends in Q4.
Analysts led by Swapnil Potdukhe forecast billings growth of 10 per cent for the recruitment segment in FY27.
The brokerage has cut its March 2027 target price to Rs 1,050 (from Rs 1,100), citing a sharp correction in the stock prices of investee companies (Eternal and PB Fintech), while maintaining an unchanged holding company discount of 25 per cent to the current market price.
Growth in the real estate (99acres) business was limited to 1.9 per cent in the quarter.
Management said changes in the sales organisation and processes had a transitional impact on Q4 billings.
The matrimonial (Jeevansathi) business maintained over 20 per cent Y-o-Y growth in Q4, with full-year growth at 28.5 per cent.
The education (Shiksha) segment remains under pressure, declining 13 per cent Y-o-Y.
Revenue has been hit as artificial intelligence-driven search increasingly answers user queries directly, reducing referrals to the platform.
Citi Research expects a 50-basis point sequential decline in overall operating profit margins to 42 per cent in Q4, with operating profit rising 25 per cent Y-o-Y to Rs 320 crore.
While margins may improve slightly in smaller verticals, this is likely to be offset by sharper compression in the recruitment segment, the brokerage said.
It maintains a "sell" rating with a target price of Rs 1,120 per share.