Naukri Pulls Ahead of Peers

As job markets across the world sputter, recruiters all over have been feeling the effects. It is no different for India’s leading online recruiter, Naukri.com. For the year ended March 2009, Naukri’s parent company, Info Edge Ltd (BSE:NAUKRI.BO), announced revenue growth of 14% over the year to Rs. 2737.96 million (~$58 million). EBITDA of Rs.938.64 million (~$20 million) grew 11% over the year.

However, for the quarter, revenues fell 7% over the year to Rs. 641.58 million (~$14 million) while EBITDA of Rs. 245.16 million (~$5 million) grew just 2% over the year.

Naukri’s recently released JobSpeak index for May isn’t looking very upbeat. The overall Job Index in May fell nearly 2% over the month, with the telecom and pharma sectors, in which hiring fell 12% and 14%, respectively, being the worst affected. However, management believes that besides IT, banking, real estate and retail, other sectors seem to have bottomed out, and they expect a recovery in the coming months.

According to analysts, there are fewer jobs in the market and more jobs in smaller towns than in the major metropolitan areas. The company is expecting the job situation to look up by September.

In a ComScore survey, Naukri.com attracted nearly 61% traffic share in February 2009, its highest share ever. It has nearly 3 million unique visitors with 106 million page views. It leads the competition by quite a margin: the global giant Monster.com had traffic share of only 27% in February 2009.

Naukri attributes its success to its having nearly 70,000 job listings at any given point in addition to continued investments in improving user experience for both job seekers and recruiters. As part of these investments, the company recently launched Job Search on Chat – ‘NaukriOnChat’ – which not only enables job search through chat messenger on Gmail/GTalk but also lets applicants view job details and apply via chat. With the Internet picking up as a job search medium and as nearly 70% of the Indian net-using population uses chat services, Naukri expects chat to be a popular tool for growth. Further, given that chat consumes lower bandwidth and will be a time-efficient way for applicants as it does away with the need to visit the site, Naukri is planning to extend the service on Yahoo! and MSN as well.

Naukri is also managing to control its costs. Instead of laying off people or shutting offices, it has resorted to controlled back fill and has only marginally reduced headcount. Further, it has controlled advertisement spend, but since the competition seems to be more affected than Naukri, the company is still managing to attract customers.
 
Their stock meanwhile, is currently trading around Rs. 608 (~$13).