A Peek Into India’s Job Portal

A recent Manpower Employment Outlook Survey conducted for Q309 painted a rather rosy picture of employment opportunities in India: it reported active hiring plans for the quarter, with 30% of employers expecting to increase their headcounts, 7% anticipating a decrease and 45% forecasting no change. These numbers translate to an improvement of 4% in the outlook compared to the previous quarter, even though the outlook is still 24% weaker over the year.

Naukri.com, India’s leading online recruiting agency, can sure hope for a better performance in the coming quarters. They also claim to be seeing some improvement in hiring activity, which has picked up recently after having bottomed out in December of last year. The Naukri JobSpeak index reported 1.3% improvement in new hiring in July 2009, compared to growth of 8.1% in June. However, their company’s key sectors—IT, retail, real estate, and banking and financial services—are still facing challenges.

For Q1 ended June 2009, revenues of Naukri’s parent company, Info Edge Ltd, slipped 16% over the year from rupees (Rs.) 63 crores ($12.96 million) to Rs. 53 crores ($10.9 million). EBITDA also slipped 2.16% over the year and stood at 24.34%.

Naukri.com accounted for Info Edge’s 84% revenues compared with an 88% contribution a year ago. For the quarter, the recruitment top line fell 20.3% over the year with Naukri Recruitment Solutions revenues declining 21.4% and Naukri Candidate Services declining 1.6%. EBITDA for the Naukri segment also fell to 41.8% from 47.13% a year ago.

In other operating metrics, Naukri had 17.6 million resumes posted on its site, compared with 16.7 million a quarter ago. During the quarter, an average 12,000 resumes were added daily, compared with 10,000 a quarter ago. The company’s number of paid customers decreased to 17,700 from 18,500 a year ago and 17,900 a quarter ago.

IT’s share in Naukri’s revenues decreased marginally to 25% from a 27% contribution a year ago, which is no surprise given that Indian IT firms are instead focusing on improving utilization. The share from recruitment consultants stood at 24.6% versus 23.5% in the same quarter of the previous year, and the infrastructure segment contributed 21% of revenues. It is this diversified portfolio that has enabled Naukri to retain its market leadership in spite of the downturn. According to a comScore survey, traffic on Naukri’s site was close to 61% of market share in May and has been at over 60% levels for the past four months compared with the 50% market share held a year ago.

Meanwhile, the company is continuing to improve the user experience on its site. They are changing the algorithm within the user interface for both recruiter and job seeker functions. Also, they have launched a site called FirstNaukri for campus hiring and a career counseling site. Recently, Naukri allowed its users to send CVs free of cost to prospective employers through SMS.

For Info Edge’s other verticals, net revenues grew 15% over the year. However, amid the real estate market sluggishness, revenues at the 99Acres real estate portal fell 20% over the year. Even so, 99Acres improved margins and reduced losses by 54% over the year. While the segment remains weak, there is some traction visible in lower-priced projects. According to comScore data, 99Acres’ traffic share has gone up to the 40%-45% range over the last few months from the 30% traffic commanded a year ago.

Revenues at the company’s matrimonial site, Jeevansathi, grew 27% over the year with EBITDA losses falling 83% during the period. The site had 3.12 million more profiles added to its database in the quarter compared with the 2.31 million addition a year ago. They are continuing to invest in the offline-online model and the site now has 14 offline centers. They are looking to break even for the business by this financial year.

Other initiatives – the networking site, Brijj.com; education information site, Shiksha.com; and areal estate, site Allcheckdeals.com — are growing their viewership, but the revenues are still slow to trickle in. Brijj has nearly 2,400 new registrations a day, but they realize the need to work on improving the engagement of the users and the quality of the profiles.

Shiksha, which offers information about educational programs and universities across the country and overseas, also witnessed nearly 15,000-20,000 visitors per day. In India, the education ad spend on print is estimated to be more than Rs 1,000 crores (~$210 million), and Shiksha is targeting this spending through its business model, which is based on both advertising and generating leads for clients.

The stock is currently trading at Rs 684 ($14).