Info edge was suggested by me at 670rs last year.The prospects looks far more exciting and there can be tremendous upside in the counter even from present levls of 1360rs.
Scripscan=Info Edge (India)
Cmp=1360
Target=2000
Duration=6-9 months
Traded on=BSE-NSE
Business:Info Edge owns some of India's most popular internet properties such as – naukri.com (India's #1 job portal),jeevansathi.com (India's #3 matrimonial portal)and the property portal,99acres.com.The company also owns Quadrangle, an offline division focussed on executive search.
Industry Structure & Developments: Internet is similar in many ways to mass communication media like print,television and radio. Internet however, offers significant advantages over other mediums like speed, interactivity, longer shelf life and ease of access resulting in its proliferation worldwide. Worldwide the internet companies typically earn revenue by charging a fee for providing / exchanging information or for advertising / selling products and services.Info edge businesses are very similar to such businesses worldwide in terms of operations and revenue model.
Internet and computer penetration:India is experiencing a strong growth in internet and PC penetration.The frequent high quality internet users in India are expected to increase from 2.8 million in FY 2007 to 4.3 million by FY 2008 as per estimates of the Internet and Mobile Association of India.The Government has also adopted a number of policies that are promoting internet penetration in India.All these are expected to boost the companys profits and turnover tremendously in the coming years.
Conclusion:The valuation looks stretched at 32x FY09E earnings.However,the company is in the high growth phase with its plans to diversify into providing online classified services in new market segment.INFO EDGE is the only listed pure internet based play with no benchmarks.Abroad, good online businesses get huge valuations,due to their high growth rates and high margins.Info edge has a significant early mover advantage in the online recruitment segment in India.Naukri.com is currently India's No.1 website for online recruitment services, based on the data provided by Comscore. It was also rated as India's 7th most visited website by Alexa.
Considering the robust outlook,strong and experienced management and high potential,Info edge looks all set to rock."GO FOR IT".
Regards,
ARUN
I can be reached at:arunanalyst@rediffmail.com
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Wednesday, November 28, 2007
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