Synopsis : Nomura has maintained a 'Buy' rating on Info Edge with a target price of ₹1,320, implying 29% upside. The brokerage believes strong growth in Naukri and 99acres can offset near-term weakness in the education business, where AI is disrupting traditional search traffic.
Info Edge, the parent company of Naukri.com, 99acres, Jeevansathi, and Shiksha, has delivered a stronger-than-expected business update for the first quarter of FY27. Following the performance, Nomura has reiterated its 'Buy' recommendation with a target price of ₹1,320, indicating an upside potential of nearly 29% from current levels.
Naukri Drives Strong Quarterly Performance
The recruitment business emerged as the biggest positive surprise during the quarter.
According to Nomura, Naukri's billings increased 17.5% year-on-year, significantly higher than the brokerage's estimate of 10%.
The strong performance reflects improving hiring activity, particularly in premium technology recruitment, where specialised roles continue to command higher revenues. Nomura also highlighted the company's AI-powered consumer offerings, including resume-building tools, mock interview platforms and job assistance services, as additional growth drivers.
The brokerage noted that these initiatives helped offset weakness in Middle East hiring caused by geopolitical uncertainties.
99acres Recovery Continues
Info Edge's real estate platform 99acres also exceeded expectations.
The business reported 16.6% year-on-year billings growth, outperforming Nomura's forecast of 14%.
The brokerage said the recovery follows temporary operational disruptions during the previous quarter, when changes in the sales organisation and billing processes affected growth. With those issues now behind it, Nomura expects the real estate segment to maintain healthy momentum over the coming quarters.
AI Continues to Pressure Education Business
While the recruitment and real estate businesses performed well, the education platform Shiksha remained under pressure.
The segment reported a 22.8% decline in billings, primarily because AI-powered search tools are changing how students discover educational content online.
To counter this trend, Info Edge is introducing new AI-driven products and services aimed at reducing dependence on traditional search traffic. However, Nomura believes these initiatives will require time before they begin contributing meaningfully to revenue.
Meanwhile, Jeevansathi delivered steady performance, posting around 14% year-on-year growth in billings.
What Investors Should Watch
Overall company billings increased 14.4% year-on-year, comfortably ahead of Nomura's expectation of 10%.
The brokerage expects Info Edge to deliver around 10% billings growth during FY27, while closely monitoring hiring demand, execution in the real estate business, and the company's ability to adapt its education platform to the AI-driven environment.
Key risks include a slower recovery in recruitment demand and weaker performance from the company's listed investment portfolio.
Disclaimer: This article is for informational and educational purposes only. The views, ratings and target prices mentioned are based on a brokerage report by Nomura and should not be considered as investment advice or a recommendation to buy, sell or hold any security. Equity investments are subject to market risks. Investors should conduct their own research and consult a SEBI-registered financial advisor before making any investment decisions.
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