Across the globe, economies seem to be recovering. The latest Job Search Index by the Indian recruiter Naukri.com (NAUKRI.BO) reported that May hiring activity was up 29% over the year. Growth is returning across all sectors with key industry sectors such as IT–software, banking, and auto returning to pre-downturn levels. For these three sectors, the May 2010 job index grew 56%, 47%, and 40% respectively over the year. Similar positive sentiment is reflected in Naukri’s final quarter results reported earlier.
After three quarters, Naukri’s holding company, Infoedge, showed positive growth with revenues of Rs 65.2 crores (~$14 million) growing 13% over the year. Operating EBITDA grew 19.5% at Rs 21.6 crores (~$4.6 million) over the year. However, for the year, revenues fell 5% over the year to Rs 232 crores (~$50 million) with EBITDA rising 2% over the year to Rs 66.6 crores (~$14.3 million).
By segment, the recruitment vertical of Naukri, the Naukrigulf, Quadrangle, and Jobseeker services, contributed 84% of the company’s revenues compared with an 86% contribution a year ago. However, the recruitment sector is improving, and revenues grew 10% in the quarter over the previous year. For the year, revenues from recruiting services were down 7.7%. Naukri grew 5% in Q4 over last year but for the year declined 12%, and the EBITDA margin of 42% in the quarter slipped from 49.3% a year ago. For the fiscal year, the EBITDA margin stood at 41%, down from 46.8% last year.
Among other statistics, the company ended the quarter with 20.7 million resumes compared with 19.7 million a quarter ago. During the quarter, it recorded the addition of nearly 11,300 resumes daily. The number of paying recruiters grew to 20,100 compared with 17,900 a year ago. In the full year, the company had 35,500 customers compared with 34,000 last year.
Naukri is continuing to expand its market reach and recently tied up with Dow Jones to enter into an exclusive agreement with the Wall Street Journal’s India website. The agreement will also help Naukri with its mobile initiative since the Wall Street Journal’s India website and a mobile application will feature premium job listings from Naukri.com and will enable users to browse and search across industries for jobs offering salaries greater than a predefined annual compensation. Further, content from WSJ.com will be available to be published in a cobranded newsletter for Naukri.com’s database of job seekers and recruiters.
Realizing the importance of social networking, Naukri.com is also integrating Facebook’s plug-ins on its site to help users share job postings. Naukri.com has partnered with Facebook to feature the “like” button and “activity feed” plug-ins on its site.
With the economy recovering, Naukri will also see competition increase, not only from other traditional job search engines such as Monster.com, but also from other areas such as LinkedIn. But the management isn’t too worried. They claim to have access to nearly 60% of the Indian online job traffic and aren’t seeing major moves on the part of their competitors. With regards to LinkedIn, the company believes that it and LinkedIn operate in different spaces, with Naukri’s business being volume driven whereas recruitment through LinkedIn operates at a headhunting level and thus does not command higher volumes. Still, it will be interesting to see how the Indian employment landscape evolves in the reviving economy and how Naukri stands in the face of such competition.
The stock is currently trading at Rs 827 (~$17.83) after having touched a 52-week high of Rs 1,025 (~$22.04) earlier this quarter.