With a substantial growth in scale during the past few fiscal years, Info Edge has crossed Rs 2,000 crore revenue mark during FY23. However the company slipped into losses during the fiscal following the exceptional items booked of over Rs 500 crore.
We will talk about these exceptional items in the later part of the story, for now, let’s break down its revenue and expense numbers.
Info Edge’s revenue from operations grew 47.6% to Rs 2,345 crore during the fiscal year ending March 2023 in contrast to Rs 1,589 crore in FY22, according to the company’s consolidated annual financial statements reviewed by Entrackr.
Info Edge generated 74.6% of its total operating income through its recruitment solutions portal Naukri.com. Collections from this vertical surged 48% to Rs 1,749 crore in FY23 from Rs 1,182 crore in FY22.
The company’s collections from its real estate platform 99acres inclined by 31% to Rs 284 crore during the last fiscal year from Rs 217 crore in FY22. The remaining operating revenue of Rs 312 crore came from matrimonial biz Jeevansathi and education platform Shiksha.
Besides this, Info Edge also cornered Rs 393 crore as non-operating income, driving the overall revenue by 35% to Rs 2,738 crore during FY23.
As per Fintrackr’s analysis, expenses related to employee benefits turned out to be the largest cost element, forming 59% of the total expenditure. This cost ballooned 47% to Rs 1,097 crore in FY23 from Rs 746 crore in FY22.
Spendings on advertising & promotions surged 42.7% to Rs 408 crore during the year from Rs 286 crore in FY22. Info Edge also recorded depreciation-amortization and network cum other related charges of Rs 73 crore and Rs 63 crore respectively during FY23.
Info Edge’s total annual expenses soared 54.9% to Rs 1,857 crore during FY23 as compared to Rs 1,199 crore in the previous financial year. Unlike FY22 where its profits grew to Rs 12,882 crore, the company slipped into red and posted a Rs 70.4 crore loss in FY23.
The inflated profits in FY22 were mainly due to Info Edge’s participation in offer-for-sale (OFS) where it sold over 49 million shares for a total consideration of Rs 375 crore.
The inflated profits in FY22 were mainly due to Info Edge’s investments in Zomato and PolicyBazaar as effective from the listing date both companies ceased to be and associate company of Info Edge and hence had been reclassified as financial investment which will be fair valued at each reporting date in respective to their financial statements. Unrealized mark to market gain of Rs 7,867 crore and Rs 2,280 crore till the date of listing of Zomato and PB Fintech (PolicyBazaar) was credited respectively through the exceptional items to its income statement during FY22.
Info Edge’s losses were largely because of the impairment of its investment in Rahul Yadav’s 4B Networks. Info Edge had impaired around Rs 532 crore which consisted Rs 719 crore of goodwill, Rs 80.8 crore for net assets, non-controlling interest payable of Rs 280 crore, and Rs 12 crore for ICD given.
The company had impaired the amount considering current state of affairs and other relevant factors including excessive cash burn, prevailing liquidity issues and significant uncertainty towards funding options.
The company has also written off its entire investment in Bijnis (Bizcrum Infotech Pvt Ltd), constituting Rs 76.65 crore. Backed by Matrix Partners, Sequoia, and WestBridge, Bijnis is B2B (business-to-business) marketplace for the unorganized retail segment. In 2021, the startup raised $30 million in a Series B round. For the fiscal year ending on March 31, 2022, the New Delhi-based company spent Rs 89 crore to make Rs 25 crore from operations.
“This is to clarify that the write-off taken in Bicrum Infotech Pvt Ltd is a technical write-off due to the unspecified liabilities on Bizcrum which may materialise owing to the buyback obligations in the existing shareholders’ agreement signed between the company and the investors. This liability is contingent in nature and has been factored in based on the conservative accounting policies followed by the company in compliance with IndAS accounting standards. Therefore, this is not a reflection on the company’s financial performance, the market opportunity and the value proposition,” said Rishabh Katiyar, part of the investment team as Principal at Info Edge Ventures.
“Further, this liability would only materialize if the company is unable to provide an exit to the key investors via other exit mechanisms like third party sale, listing, among other mechanisms captured in the agreements by a specified date in future and all the key shareholders together choose to exercise the buyback right as an exit mechanism,’’ added Katiyar.
Info Edge’s cash inflows from operations were also affected and went down by 26.3% to Rs 520 crore during FY23 from Rs 706 crore in FY22. Its EBITDA margin and ROCE stood at 35.11% and 5.80% during FY23. On a unit level, Info Edge spent Re 0.79 to earn a rupee of operating income.
On a quarterly basis, Info Edge’ scale grew only 2.6% to Rs 604.7 crore during Q4 of FY23 from Rs 589.5 crore in Q3 of the same fiscal year. For comparison, the company generated Rs 589.5 crore, Rs 604 and Rs 547 crore operating revenue in Q3, Q2 and Q1 of FY23, respectively.
The effect of the exceptional item booked by the company can also be seen in its Q4 bottom line where it recorded Rs 503 crore loss as compared to Rs 46.4 crore profit in 43.