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Naukri Performing Well, But Should Not Underestimate Competitors

Posted on Thursday, Sep 16th 2010

According to the latest Job Seach Index released by Naukri.com (NAUKRI.BO) for the Indian market, hiring activity in the country has grown 28% over the year this August. The index reported hiring activity across industries, functions, and cities, with the banking sector reporting 14% growth followed by information technology enabled services’s (ITES) 6% and construction’s 5% growth.

During the quarter, Naukri’s parent company, InfoEdge, saw revenues increase 24% over the year to Rs 66 crores (~$14.2 million) with margins rising to 19.1% compared tp 13.8% a year ago. InfoEdge’s recruitment vertical, which comprises Naukri, NaukriGulf, and Quadrangle, continued to improve with revenues rising 23.7% to Rs 54.8 crores (~$11.83 million). Naukri’s top line was up 22.5%. EBITDA margins for the vertical were at 41.9% versus 39% a year ago.

Among other statistics, Naukri added an average of 13,000 new resumes daily to end the quarter with 21.9 million resumes versus 17.7 million a quarter ago. It recorded 20,900 paying customers compared with 17,700 a year ago. As per comScore, Naukri has maintained its traffic share of more than 60% for the past fourteen months. Naukri is significantly ahead of its competitors Monster India, which had a market share of under 30%, and TimesJobs which had a market share of close to 10% in July of this year.

Earlier this quarter, Naukri launched its senior management–focused product, Naukri Confidential, which enables senior executives to upload resumes and search for jobs without revealing identities. Naukri has been lagging in this segment and is already facing competition from LinkedIn and, of late, ABC Consultants, one India’s oldest and leading brick-and-mortar recruitment consultant. Naukri continues to claim that LinkedIn is not its competitor. But LinkedIn’s model makes it particularly good in senior management hiring. LinkedIn is still rather small in India, but with over six million India-based professionals on its network, it is gaining ground. Meanwhile, ABC Consultants is also working at launching its senior management hiring website, theheadhonchos.com, which is expected to pose tough competition to Naukri Confidential.

Besides senior management, Naukri is also looking forward to the performance of FirstNaukri, its campus hiring and new graduate focused recruitment channel. It is hopeful that with the market recovering, campus hiring will gain momentum. It has launched customer trials and is getting good feedback on the product.

The stock is trading at Rs 1,144.20 ~ $24. It touched 52-week high of Rs 1,172.80 (~$25.30) earlier this month.

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