Info Edge (India) Limited (NAUKRI) Q2 2027 Earnings Call Transcript

Good afternoon, everyone. I am Anand Gansal. I am joined by my colleague, Vineet Ranjan. Thank you for joining us. We will wait for a couple of minutes to allow more participants to log in. Vineet, we currently have 100 participants with us. Over to you to guess our story.

Thank you, Anand. Good evening, everyone. Welcome to Info Edge India Limited quarter to FY27 Anis conference call. Joining us today from the management, we have Mr. Sanjeeb Bikchandani, founder and vice chairman, Mr. Hitesh Avroi, co-promoter and managing director, and Mr. Himanshu Agarwal, chief financial officer. Before we begin, I would like to draw your attention to the detailed disclaimer included in the presentation for Goodwater's sake. Kindly note that this conference call is being recorded and all participant lines will be on mute. And there will be an opportunity for Q&A towards the end of the call. Now, I will hand out the call to Hitesh for his opening remarks. Thank you and all to you, Hitesh.

Thank you, Vineet, and a very good evening to everyone. And thank you for joining InfoEdge's earnings call for the second quarter and first half of FY27. I will start with our overall read for the quarter and the half-year, and then take you through each business in more detail. In Q2, standalone billings grew 13% by OI. Revenue grew 13% to Rs. 842 crores, and operating profit grew 30% to Rs. 347 crores. The operating PBT margin was 41%, up 541 basis points year-on-year. Cash generated from operations was Rs. 373 crores, up 27%. For the first half, buildings grew 14%. Revenue grew 12%. And operating profit grew 32%. Cash generated from operations in H1 was Rs.598, up 27%. And we ended September with a cash balance of Rs.4976. The detailed numbers are in the earnings deck. Recruitment, Ninetan Acres, and Jeevan Sati together are growing faster than the standalone numbers suggest, while reported growth is diluted by Shiksha, which is undergoing a structural transition. Excluding Shiksha, standalone billings grew over 14% in Q2 and about 16% in H1 against reported growth of 13% and 14%, respectively. Starting with the recruitment segment, in Q2, recruitment billings grew 13% and revenue grew 13%. The timing of customer renewals affected reported growth this quarter. Some clients renew ahead of schedule, while others defer to a later quarter, shifting billing between quarters without changing the underlying trend. In Q1, timing lifted reported growth to 17.5%. In Q2, it worked in the opposite direction. Adjusting for these timing differences, we estimate underlying growth at around 15% in Q1 and around 14% to 15% in Q2. For this reason, we believe the first half, the half-year performance provides a more reliable read than any single quarter. H1 recruitment billings grew 15%, and over a longer period, these timing differences partly even out. In our core India B2B recruitment business, the drivers are broadly similar to Q1. Hiring activities stayed steady, led mainly by replacement demand, with some pickup in a few segments. Enterprise renewal rates held up, and premium hiring continued to do better than the broader market. Across sectors, Q2 billings grew 3% in IT, tech, and BPM, 7% for GCCs, and 18% in other sectors, while recruitment consultant billings grew 7%. As renewal timing affected these numbers as well, the half-year gives a relatively better picture. In H1, growth was 9% in IT, tech, and BPM, 19% in GCCs, 16% in other sectors, and 5% for consultants. Other sectors' growth improved in H1 over last year, led mainly by BFSI, consumer, retail, and manufacturing sectors. Beyond B2B, our jobseeker business, Knockree 360, grew billings by 37%. Paid subscribers are now 2.7% of monthly active users, compared with 1.3% in January of 2025. AI-led services are playing a growing role in conversion. The business operated at an operating PBT margin of 64%. Job Hai, while still small, group billings by 86%, with investments level broadly unchanged. Lastly, Nokri Gulf group by 9%. It remains profitable at margins of around 36%, and we see scope for growth to recover as conditions in the region normalize. AI and data products billings now contribute a high single-digit share of our recruitment top line, with an annualized run rate of around 240 crores based on Q2. This comes from AIRX and TalentPulse on the B2B side and from AI-led services for job seekers such as mock interviews, our job seeker agent Neo, and the AI regime-making service. Enterprise uptake normally follows a familiar path. Customers first try the product, they start small, embedded in their hiring workflows, and then commit larger budgets. Early feedback on both AIRX and TalentPulse has been very positive. Our focus now is to add customers, deepen usage, and show measurable value so that consumption grows materially over time. Building an AI product is getting easier. Getting it adopted at scale is not. We work with over 150,000 paying recruiter clients through a sales network across 80-plus cities, and our platform has 120 million profiles with around 20,000 added and over 9 lakh updated every day. This combination of distribution, data, and job seeker scale is difficult to replicate, and we believe it gives us a clear right to win in AI-led hiring. At its core, Naukri is a sourcing platform. Recruiters search our resume database to find and reach the right candidates, complemented by job postings. Hiring volumes follow the macro environment, so our effort is focused on what we can influence, our share of hiring, and what we earn per hire. We are doing this by building a broader set of hiring solutions around the core, including AI-led sourcing, talent intelligence, employer branding, assisted hiring, and assessments across the premium, mid-market, and value segments. In the premium segment, which includes Nokia top-tier, premium X, IAM jobs, and hiring several capabilities are packaged at no extra cost today, leaving room for further monetization. In the mid-market, the focus is recruiter productivity and adjacent services, while in the value segment, Job is building an AI-enabled marketplace for SMEs and enterprises hiring full-time and gig workers and recruitment firms. For job seekers, we are adding career insights, upskilling, and interview preparation through Knockree 360, Minis, and Coding Ninjas. These are largely self-serve and margin accretive. Moving over to the real estate segment, growth in 99 acres continues to accelerate. Billings grew by 21% year-on-year in Q2, up from 17% in Q1. Revenue grew 17%. Operating losses reduced significantly by 93% from Rs. 23 crores in Q2 of FY26 to less than Rs. 2 crores in Q2 of FY27. 99 acres generated cash from operations of Rs. 22 crores in Q2 against Rs. 2 crores a year ago. Our leadership position strengthened further across key operating metrics. Web time share amongst the top three portals was 49% in Q2 and 51% in September. App time share was 49% in Q2 and 50% in September, up from 27% in Q2 of last year. Based on similar web's revised app data series, app day use grew 25% year on year. Supply momentum remained healthy across categories. Live listings across resale, rental, and commercial grew 23% year-on-year from owners and 14% from brokers, while new project listings grew 15%. More brokers, developers, and owners are choosing 99 acres to market residential and commercial properties across the country. Traffic leadership, wider supply, and product improvements are translating into higher engagement. Property inquiries across all categories put together grew 33% year-on-year. We also continue to optimize our marketing mix and get more out of our marketing spend. Marketing investment was about 13% lower year-on-year, while inquiries kept growing. This demonstrates how market leadership can begin to translate into better economics. We continue to apply AI across user experience, inquiry generation, marketing, and operations with early benefits visible in engagement and marketing efficiency improvements. Looking ahead, we aim to gain further share in H2 in both traffic and revenue and will continue to invest to support this while improving profitability at the same time. New projects remain a significant opportunity, which we estimated about to be 6,000 crores across digital and non-digital spend. Expanding our presence here is a strategic priority through investments in content, product, and client delivery. We are also taking 99 shots beyond NCR to more cities. As I lead over other portals widens across supply, traffic, and monetization, we expect operating leverage to emerge progressively through the rest of FY27. We expect 99 acres to generate positive operating cash for FY27, with cash generation strengthening over time. Moving over to the matchmaking segment. Matchmaking billings grew 23% in Q2, with Jeevan Sati up 18% and Isle up 40%. The segment operated near breakeven at the operating PBT level. Jeevansati reported an operating profit of Rs. 2 crores and an operating loss of Rs. 3 crores. Cash generated from operations for the segment was Rs. 3 crores versus a cash loss of Rs. 2 crores in Q2 of last year. In Jeevansati, we retained a profile share of over 45% in Hindi-speaking markets and continue to lead on daily logged-in users in these markets. The team is testing a number of new features and paywall formats around value, convenience, and affordability. And AI is improving recommendation quality. We expect Jeevan Sati's billing growth to accelerate in the second half. We expect IL to continue on a high growth trajectory. Since moving to a premium model for women, we believe IL has one of the highest shares of female users amongst dating apps in India, which improves the experience on both sides of the platform. Lastly, the education segment. Shiksha's billings declined 27% and revenue declined 9%. The business operated near breakeven at the operating PBT level with cash losses from operations of Rs. 16 crores. AI-driven changes in search behavior have reduced the referral traffic Shiksha relied on, and this continues to affect delivery outcomes for clients. These changes require us to evolve the business model. That pivot is underway. We are building domestic counselling supported by AI voice boards to create a direct relationship with students rather than depending on search. In study abroad, we are widening destination coverage to the UK, UAE, and continental Europe as student demand shifts. Our focus is on returning structure to growth while keeping losses contained during the transition. A little, some, you know, AI across info, let me just tell you what, how we are thinking about it. Beyond product-specific applications, AI is changing how we operate with efficiency gains across functions, including marketing, pricing, lead qualification, telecalling, and product development. Across recruitment, real estate, and matchmaking, our proprietary data, marketplace relationships, and domain expertise position us to benefit from AI through better matching, recommendations, and customer outcomes. At the same time, AI is changing how users discover information, and we need to keep evolving our products and business models. We continue to step up investment in AI infrastructure, talent, and tools. In most products, AI improves outcomes within the core offering. Where it is sold separately, it contributes to AI revenue discussed earlier. A brief word on our investment portfolio. Our investment portfolio now spans around 135 companies across AI, deep tech, and consumer tech, with about Rs. 5,000 crores invested through our balance sheet and AIFs. Several companies have listed and others have raised follow-on rounds from credible investors. We invest early and hold for the long term and we expect the portfolio to create significant value for shareholders over time. Let me close with how we see the years ahead. Our strategy rests on three pillars. First, strengthening our core marketplaces through technology, AI, and better customer outcomes. Two, second, growing our AI monetization through AI-first products, products which would not have existed without AI. Products like AIRX and TalentPulse for recruiters and AI services for job seekers. Third, scaling a broader set of growth engines, including Nokri 360, Coding Ninjas, Job Hai, Ambition Box, 99 Acres, Jeevan Sati and Ayal that expand our opportunity. Several have moved beyond early validation and are now scaling with headroom for deeper penetration, share gains, pricing and new customer segments. As these businesses scale, much of the incremental revenue can be generated on our existing platforms, creating room for operating leverage. stronger margins, and higher cash generation over time. Together, these give us confidence in building a more diversified and sustainable growth platform for the long term. Before we move to Q&A, as we announced today, I will be stepping down as Managing Director and CEO at the close of business on December 2nd, after nearly 27 years at InfoEdge, and Sanjeev will take on the role of Executive Vice Chairman, Managing Director, and Group CEO from the 3rd of December. It has not been an easy decision, but it is one I have thought through carefully over time. I believe the company now has a depth of leadership and institutional strength to move confidently into its next phase. Subject to shareholder approval, I will continue on the board as a non-executive director. I would like to thank all of you for your trust and support over the years. With that, we are happy to take your questions.

Thank you, Ithish. Anand, we have a few questions already in the queue. Maybe we can start with them.

Yeah. So, thanks, Vineet. Anyone who wish to ask a question, may raise your hand. We have a couple of questions. We'll take them. And when we follow, we'll have one by one. So, the first question is from Sachin from Bank of America. Sachin, go ahead and ask your question.

Thanks, Anand. Good day, management. I have three set of questions. Hitesh, your decision is surprising. So two questions out here. I just wanted to understand, will Sanji be taking over a full-time CEO, or is it more like a stop-gap arrangement until we hire something new? And from a transition point of view, anything we need to look at, presume you will be involved in strategic decisions now that you will be a board member subject to shareholder approval.

Sanjeev, you want to take that, huh? Listen, I mean, we haven't thought about that yet. Obviously, Hite is still there for a month, and beyond that, he's there anyway, and available. And I'll be taking his counsel. I'll be obviously talking to NRC, and we'll figure out how to evolve the leadership structure at the top going forward. So there's no decision taken on hiring more people yet. As far as, you know, I'm concerned, I'll be taking over. I'll be listening a lot. I'll be observing. I'll be asking questions. I'll be learning. I'll take this guidance. And the good bit is that the leadership below him, who work around him, is very, very good. So, you know, already I've done three meetings today in the last two hours, and people are totally on top of their jobs, and so I don't think I'll have actually that much to do.

Got it. Thank you. Very clear. Second question, you're on the business, and this is largely on the billings growth in this quarter. Sure. Last quarter, we saw billings growth of close to around 17%. And adjusting for that one of, let's say, it was 15%. When you look at the revenue, typically, the last quarter billing growth does translate into revenue. In that context, it looked a bit softer at 13%. Anything to look into that now that the AI billings is also a high single digit in terms of share, is that influencing you? And there's something out there. And of course, the related question is, billing's growth in this quarter was 13%. Is this the new normal or, you know, is there a timing issue out there where, you know, numbers, you know, could move just the way it moved last quarter?

You know, see, billing gets affected. See, a lot of our clients renew at quarter end. Sometimes negotiations drag. Sometimes they, you know, deals close early and sales get pulled and billing, you know, get pulled into a quarter and sometimes they get deferred. Right. So it's from a billing standpoint, I think it's always better to look at YTD or, you know, at least H1 by, you know, because timing differences tend to get evened out over time. So in Q1, we actually had said on the call last time that 17.5% was not the real number. It was to us, it was more like 14, 15% because some sales got pulled in. In this quarter, you know, again, the timing differences sort of work in the other direction. So our sense is that our business is growing at 14-15% right now. Now, internally, these are the kind of targets we are setting for the sales team as well for going forward. So that's what it looks like right now. Now, as far as revenue recognition is concerned, see, revenue is recognized over 12 months because most of our deals are annual in nature. So even if you renew towards in Q1, you know, that deferral kicks in over the next three quarters.

Got it. So directly revenue should be in the 14-15% range, you know, as the billing growth stabilizes out there. And last question I have on margins. Wanted to understand, is this shift towards an AIRX directly helping you guys in terms of margins, how to think about margins at the recruitment business? And clearly for 99 acres, we could see the market share change. Wanted to understand if this is structural and hence on the back of it, we should continue to see margin improvements at 99 acres as well.

So in the AI offerings we've launched, you know, are of course very high cross margin. But our strategy, our go-to-market strategy right now, especially in the B2B side, is to go for penetration and adoption. You know, we have 150,000 customers in Okri. There are at least 40,000 large clients who renew, you know, annually, who buy a big product, you know, where ARPU is high. Technically, I mean, theoretically, ARX should be, it should be possible to sell ARX to everybody, all these 40,000 accounts. Right now, the number of accounts who are trying ARX is 2,000, right? And normally when clients start with a new product, they start small. They try it out. If they're happy, they renew, they buy more. So on the ARX front, our strategy is to make it like a no-brainer for clients to try it out because we are very confident of the product and our ability to deliver. So, our goal for the next, I would say for the next maybe 24 months is going to be to drive penetration, to get as many customers to use ARX as possible, and then to get them to adopt it, use it, and then renew, and then at renewal time, get them to upgrade and buy more. You know, because in the end, we believe that customers who move to ARX will end up hiring more people through Naukri. You know, so our hiring share will grow with them. They will also be able to hire talent faster and better, and their recruiters will become more productive. And ultimately, this will mean more revenue for us and higher growth for us and at high margins, right? Right. Because once the technology is developed, once the CapEx is done, you know, it's about, you know, there's not much incremental cost. So that's our philosophy. And, you know, this is the approach we followed with RestEx maybe 25 years ago when we launched RestEx. Today, about a large percentage of our revenue comes from RestEx. 70-80% of our revenue in Nokia comes from RestEx. In the early years, we gave Restex for free, then we made it half price, then after that also we gave a lot of discounts, and if you look at where we are today, we perhaps charge maybe 5x or 10x of what we used to charge back then, because once the product starts to work, once customers get hooked, once it starts to deliver, once they start making a lot of hiring through it, then, you know, it's easy to realize value. That's the approach we're taking for both ARX and Talent Pulse. On the job seeker side, you know, our AI offerings are doing really well. Again, AI is allowing us to price them cheap. AI is allowing us to launch new products, which could not have been possible without AI. Like interview prep, we've launched a job seeker agent, Neo. These products will keep improving. But already, you know, if you look at what has happened over the last five or six quarters, job seeker penetration of paid products has moved from maybe one and a half percent to 2.6, 2.7 percent of monthly active users on Nokri. So again, we see a huge opportunity here. And there are many more products which are under development. So we have a huge pipeline, product pipeline as well, both on the job seeker and on the recruiter side. So this is, we feel confident about this strategy. We are going to keep pushing in this direction. And our hope and our core belief is that in the end, more people get hired through Naukri. If our hiring share continues to increase, revenue growth will follow. Business models may keep evolving. We'll keep evolving.

Very clear, Hitesh. And any number in terms of where steady state margins could be in case of the new normal, where ARX becomes larger part of the product?

I don't know. It'll depend on what our hiring share ultimately ends up being. If today 40% of all people are hired through Naukri, if that number goes to 60% over time, who the hell knows where margins will go. But, you know, see, margins, like I said, you know, our margins are not really our focus right now. It's about, you know, getting more sales. It's about getting more users. It's about clients. It's about getting adoption going. Inherently, the product is high margin. Inherently, the product is high gross margin. So if you are able to sell and if you are able to upgrade clients, you know, like last quarter, We did notice that clients who bought our AI offerings ended up paying us on the average at least 10% to 15% more than clients who did not buy our AI offerings. You know, so we were able to get higher upgrades. So clients also want to try these out, and hopefully they'll work. And I don't think, you know, margins will go down. Margins will only prove we are successful. But we have to ensure that sales keep growing, you know, at higher than 10% year on year. Similarly, on your other question, around 99 acres. See, there we've been highlighting for the last seven, eight quarters now that we've been gaining traffic share and revenue share follows the lag. And that's how it's playing out. You know, our business grew by 21% last quarter. In fact, September growth was even higher. In every city now, almost we are clear leaders. Our revenue market share, according to us in our core categories, is now hitting 50%. And we continue to gain share. Our sense is that our competition, you know, in both cases, you know, their revenue actually declined. That's what we are hearing from the market last quarter. So we continue to get stronger and stronger. And like, you know, any marketplace business, this is a network effect business, there's a flywheel. And if you get strong, if you start gaining share, it's very hard for others to catch up. So, you know, at the same time, because of what has happened in our category, the competitive intensity has gone down. Housing, which was owned by REA earlier, has sold their business to Aurum. And Aurum has gone on record saying that they want to break even over the next four or five quarters. This means it's lower marketing cost. Just, you know, so we are under no pressure to spend more on marketing. Platform is built. Operating leverage is playing out. Nine acres generated 20 crores plus cash this quarter. So if all, if you continue to execute like this, you know, things will only get better.

Thank you. Very clear.

Yeah. Thanks, Achim. Next question is from Vigit Jain from Citi. Vigit, go ahead and ask your question.

Yeah, hi. Thank you so much for the opportunity. And, you know, Hitesh, again, I'll echo what Sachin said earlier came as a bit of a surprise. But my question is, you know, if my understanding is right, property and other segments have CBO positions already, right? And I know Pawan left the platform a few months back. So, I mean, is that the structure that you would again seek to go back to for recruitment business as well? Because if my understanding is right, there's no CBO at the moment there.

Yeah, sorry. Carry on, carry on. No, no. So like Sanjeev said earlier, I think he's, you know,

going to sort of take over as group CEO and he's going to, you know, meet everybody and then slowly make up on his mind on what next. So, you know, I for the longest time believe now that we have a crack team in all our articles. You know, we have people who've been around for several years. They've grown with the business. They've matured as leaders. We have a crack team in Nokri. We have, you know, solid leadership in Jobhay, 99 Acres, Jeevan Sati. So, and that is actually what gave me the confidence to sort of move on. But I get what you're saying, and I guess Sanjeev will sort of, you know, take over and then...

You know, I think nothing in a hurry. The first priority will be to give internal people an opportunity to grow. Right? And then we'll take a look. Like I said, I listen to Hitesh a lot. He's there, he's around, he's available, even after December 2 is available. I listen to the NRC a lot. I listen to the current people inside the company a lot. And then we'll figure it out, yeah.

Understood. Thank you, Sanjeev. Appreciate that. My second question, good to see the AI billings disclosure. Wanted to understand the ARR a little bit. So suffice to say that the ARR is higher than the 2.4 billion rupees, right, is higher than what you would have seen in 2Q, right? Just wanted to get a sense of what pace of growth we are looking at there. And second, should we think of this as additive versus last year? Or there is an element of the nature of deals changing as well there? The nature of client contracts changing there as well?

So, see, there was some AI revenue last year as well. We did not report it separately, especially on the job seeker side. Talent Pulse was there last year as well. So, there was some revenue from Talent Pulse. ARX is new. So, we call it only a little revenue from ARX in Q1, but it's scaled up massively in Q2. So, when I say AR is 240 crore, what we really mean is Q2 revenue into four is what we see as ARR. But so Q2 revenue from AI first products and services, products which could not have been possible to launch without AI, was 60 crores, was around 60 crores, right? So that's what we mean by, yeah.

Not as if it's cannibalizing extreme revenue.

I see. So this is nearly all additive and some of it, there would have been non-zero number in the base, but mostly coming from talent balls. Understood. Perfect. Thank you.

And job seekers. There were some job seekers that have been launched by Q2 of last year. Yeah.

Understood. The related question to that, and I think this is more in principle question, I suppose. In general, do you think that bundled pricing is the way you know, AI would, you know, see AI and AI offerings would seep through into your billings and revenue overall. By that, what I mean is you don't necessarily charge for each individual AI But your clients use them, and it enables you to raise your pricing over time. Is that the right way to even think about how you think about pricing, a bundled approach versus a disaggregated approach?

No, see, right now, we are pricing them separately. So we have a price for ARX per mandate, 3,500 rupees per mandate for companies, 2,500 rupees for consultants. So that was the other big thing. We rolled out ARX for consultants also in Q2. We have not rolled it out for consultants in Q1. Right. So, so there's a rate card rate. Similarly, there's a rate card rate for Talent Pulse, but often when we sell to clients, they buy multiple products at the same time. And then there's a negotiation and there's a, you know, so they may, they'll buy RESTX, they buy job listings, they may buy Ambition Box, they may buy ARX, they may buy Talent Pulse, and there's a negotiation. And so in that sense, when it is sold, you know, it is sold as a bundle, but there is a separate rate card for.

Understood. And my last question on advertisement spend, just on the B2C side, given that it's growing very strongly, 37% this year, I'm wondering if AI-powered offerings there and all the growth you're seeing there, and given where the market dynamics are, does it warrant higher ad spends, maybe targeted more towards candidates, which highlights some of these things? Or it's not necessary because candidates come to your platform anyway.

Yeah, yeah. So it's the latter. See, candidates, see, like I said, we are selling paid services to 2.7% of all our monthly active users on Okri right now. So there are a whole bunch of users still left to sell something to, right? And this number was 1.5% one year, maybe four, five, six quarters ago. So, there's ample room to sell AI services and our AI offerings to more job seekers on Noghri, right? So, we don't need to advertise for this purpose. Now, we may want to advertise because we want more job seekers on the platform. You know, we want to grow our share amongst job seekers, etc. That's a different reason, but not to sell these services.

Understood. Thank you so much. And again, best of luck to you, Hitesh, and to everyone else. I look forward to seeing you guys soon again.

Thank you, Vijay.

Thank you.

The next question is from Vivek from Ambit Capital. Vivek, go ahead and ask your question.

Yeah, thanks for taking my call. So, Hitesh and Sanjeev, just a couple of questions on your transition. So, in the last one year, we've seen Chintan and Pawan go. Was it really necessary for you to step down at this juncture, given that the CBO role is also weakened? And how are you thinking about filling these leadership roles? I heard Sanjeev's answer that internal succession is what you'll prioritize. But in terms of org structure, any thoughts that will help? Related question, Hitesh, for you, now as co-promoter, you still have 5% stake in the company. What's your medium to long-term plan regarding your equity stake as you transition away from day-to-day responsibilities?

Yeah, so I have a lot more than 5%, but there is no plan to, I mean, on that front, I remain financially and emotionally attached to the company. Subject to shareholder pool, I will continue to be on the board. I'm stepping down from my full-time operating role, but not stepping away. And, you know, the reason, you know, I thought about it, it's not been an easy decision to make. I've been doing this for 27 years. You know, I think we are at a stage, so there were, in my head, there were some goals, you know, which I had set for myself. You know, we wanted to, you know, we were, this whole AI transition we've been going through for several years, we wanted to have a clearly articulated AI strategy for the company in Naukri. And I think we've done a fairly good job on that front. And it's now, you know, at the back end and now in terms of products, which are generating revenue. So I think we are sorted on that front. We have a similarly 99 Acres, you know, it's been a long journey and it's been a tough one to crack, but we made tremendous progress over the last couple of years. And we are now a clear leader, and we are generating cash, and the business's growth is actually accelerating. So that gives me a lot of confidence that we've now got a second big growth engine in the form of 99 Acres. And Jeevan Sati, which, you know, several investors and analysts have encouraged us to shut down several times over the last couple of decades, also now is generating cash and is profitable. And along with Isle is actually growing in the mid-20s. And, you know, I'm sure create a lot of value in the medium term. Of course, it'll never become as large as Naukri, but it'll generate, create a shareholder value. And job A, which is strategic, more long term, you know, at least there we have product market fit, we are monetizing, we are growing 80-90% year on year. So that also is, you know, at least over a 5-7 year period, it'll get somewhere. So, this along with what Sanjeev mentioned, you know, the fact that we have a very solid management team now. We have a whole bunch of people, you know, senior leaders who've been around for more than 20 years. And of course, a lot of young people, ambitious folks who joined over the last five, seven years who want to make an impact, who want to make a difference. So, very, very smart. Most of them are smarter than I am, right? Right. And, you know, that, you know, I think institutionally, we are much stronger. We have good management bandwidth. And that, again, gives me a lot of confidence that, I mean, there is never going to be the right time. There's always going to be a lot to do. Right. This is, unfortunately, or fortunately, the business we are in, they'll keep, you know, we'll have new things happening every now and then. And every now and then, you know, it's people like us start new businesses and, you know, there's always stuff to do. So, but I just felt that this is perhaps the right time to move on for the reasons I mentioned. Personally, also, I would like to do something different and spend more time with my family and support some initiatives I've been involved in. That's why now, I mean.

Okay.

The other question is on the portfolio now. As far as recruitment is concerned, you have seen a good deal of verticalization with not just the core product, but also focused approach towards Nokia 360, then IM jobs. And of course, now you have Premium X job as well. So, in terms of each of these verticals now, you are essentially the market, right? You are defining how the market should grow. If you could help us understand now how you view the TAM, given the success of AIRx, as well as increased scalability of the candidate services piece, Gulf, etc. But if you can help us think through the TAM for the recruitment services market better, that'll help. And of course, also any further color on job hair and where you can get, let's say, as an aspiration in the next three to five years. Thanks.

Yeah, so, you know, like I've said earlier also, see, there are, you know, if you look at the market, if you want to segment the market into value, mid-segment, premium, the mid-market is where we've been very strong as a platform. But there's volume pressure there, right? So, I mean, all said and done, IT companies are not hiring as many people as they were hiring earlier. And so there's volume pressure there. The value side segment is growing rapidly, thanks to growth in gig workers and delivery services and so many other things that are happening in that segment. Demand for workers and job seekers in that segment is growing. The shoe segment, of course, low value, but they're all increasingly all online now. A lot of SMEs are also online. A lot of large enterprises are also having such workers. So this segment will continue to be a growth segment, I think, for several years to come. And, you know, adoption is, digital adoption is only getting started now. The premium segment also, we are seeing more demand for premium talent. In fact, premium job seeker views on Naukri grew by 25% year on year in Q2, right? So there's more demand thanks to, you know, these new skills, AI skills, and thanks to new, you know, demand in sectors like manufacturing and several other things that are happening. There's more demand for high-end talent. And, you know, so, so therefore, you know, you know, we have a three-pronged strategy, try and grow our share in premium, which we are trying to do through IMJobs, Iris, PremiumX, all the other things that we are doing. Value segment, Naukri can only do this much, but JobHai, along with Naukri, can, can become really large and, and more AI and more tech to enable companies to hire more, even in the middle segment, in the mid segment. I mean, it's not as a 100% of all hiring happens to an Ocree, right? Let's say 40% of all hiring happens to an Ocree or 50% of all hiring happens to an Ocree. But there, by deploying AI, by deploying AIRX, we can increase our share of hiring. And that can help us grow our wallet share from customers.

And, of course, what we're also doing is, you know, we are trying to plan,

you know, we're trying to help companies with talent planning as well. We are trying to help them with assessments as well. We're trying to help them with recruitment software. So HR tech and talent planning, like Talent Pulse, huge. There are 750 companies now who use Talent Pulse. This kind of product is impossible for anybody else to offer because nobody else has the kind of data we have on salaries and talent and skills. Nobody else has it. And we made it available, you know, on demand, on tap to recruiters and department departments of companies and usage is growing through the roof. So this is now what is the ultimate TAM of all this? I don't know. Okay. You know, I don't know how big the value segment can actually become over time. If you look at Kanzun in China, you know, $1.2 billion. $1.2 billion. Now, maybe China's 20 years ahead. Right. They work with 7 million businesses, 7 million. In Naukri, we work with 150,000, right? Premium segment, we have an option. One, the market is growing fast. Two, we are not the big daddy in premium. LinkedIn is very strong in leadership hiring. We are gaining shared. So there's a lot of runway for us in premium. And then all these new categories that we are creating, you know, I don't know how big, I mean, if every, take for example, like I said, we work with 40,000 large and medium bit-sized companies. If you can sell Talent Pulse to 8,000, 10,000 of them and get 3,000, 4,000 lakhs a year, that's a 3,000, 400 crore market opportunity. If we can take ARX to 10,000, 12,000, 15,000, 20,000 companies, get, you know, 2,000, 3,000 lakhs per company over time, that's, you know, you can do the math. Ambition Box are social listening and, you know, employer branding platform. It's a new category we're creating. I mean, it's not as if companies are spending a lot of money on this earlier, but they're finding it useful. Again, if 3,000, 4,000 companies end up, you know, using Ambition Box over time at 3, 4 lakhs per annum, you know, you get 100, 200 crores. On the job seeker side, we were, you know, till now always very wary of pushing all these job seeker services to recruiters, to job seekers, because they were, you know, like mostly delivered by humans, hard to scale and so on. With AI, you know, we can, we are able to, one, offer them cheaper. Two, we are able to offer services we could not offer earlier. A lot of, you know, students and job seekers say, can you help us prepare for interviews? We have no way of delivering that service. But with AI, we can offer it, right? And we can offer it really cheap. Agent, a job seeker agent, you know, very new thing, but good adoption, right? You know, and, you know, we have a three-year roadmap for Rio, for NIO. You know, we think we can do crazy things with New York over time. So I don't know, you know, if 10% of all job seekers in Nokia start using paid services and they start paying us 1,500 rupees a year, I don't know. It's a large market, right? So, but we have to make these things happen. What AI has done, it's opened up new market opportunities. Most companies are using AI to become more efficient. We are also doing that, you know, and that's what is helping us keep our costs under control. But more importantly, we are big believers in using AI for innovation, for creating new products, for solving problems which could not have been solved earlier, for serving customer segments which could not have been served earlier, for entering markets which we could not have entered earlier. That's largely the focus of our product development and innovation team. And that's where we see the big opportunity in the long run.

I'll add to that. You see, all these AI products you launched with now, Hidesh is saying it's 240 crore run rate. If you'd asked him six months ago, you know, I don't know. We'll try it, and we'll see what response the market gives, and then we'll figure it out. So, you know, you are limited by your imagination. You try various things. Some things work, some things don't work, and the market gets created. So we are back to the year 2000 when we were into creating a market as far as AI products are concerned. So we have to wait and watch and see what happens. But obviously, there is significantly decent traction in what has been launched so far, which is why we are getting to a place where Hitesh is now saying it's 240 crore run rate. Now, where will it go? Can't say.

This is really helpful. Thanks, Hitesh, for being so candid and sharing your reasons for departure also. Now, my last question is on 99 acres. Given that you now have a very dominant share of traffic, is that helping you monetize builders and new launches also better? Or is it still just the same secondary market, broker dominated kind of franchise? Because when I look at the billing breakdown, not much seems to have changed on that front that two thirds of billing is coming still from brokers. Is there any change in the market standing that you have with new launches and builders and how you can monetize it thanks to your traffic leadership now? Thanks.

So, you know, let me just spend two minutes on this. See, at the heart of our strategy, Ninein Acres, is our leadership in resale and in the secondary market, because that's a problem Google and Meta can't solve. You know, if you want to buy a property in the secondary market, if you want to rent a house, you have to come to us. And that's what gets users to us. That's, you know, the flywheel. And it takes time to develop this market. It's a market which perhaps did not even exist a few years ago. But now at least we've got 30,000 brokers on our platform and they post a lot of listings and we've got them in every location, in every city, in every locality, in every micro market, gets us the supply, gets us the traffic. Now, now the new home market is also several markets. So at the highest end is a new launch market. And then there's an under construction market, not every home gets sold at launch time. And so maybe half the inventory, you know, and it depends on the developer depends on the nature of the market. Hot markets are different from markets are difficult to sell in. But not every home gets sold at launch time. Of course, every developer makes a big bank at launch time because they want people to know about the project. But let's say 40-50% of the inventory gets sold in the first few months. And then the rest gets sold over the next few years. A lot of buyers don't want to buy at launch time. They would like to see the home and they would like to see construction and, you know, a lot of entry before they buy. Okay. So what happens when you get these, you know, buyers on your platform, because you have all the resale listings, you have all the other listings, is that many of them are actually naturally, they also explore under construction properties. So it's not, so enough of them don't mind waiting for a year, year and a half to move in, you know, if they get the right deal and in the right location and with all the right relevant amenities and so on and so forth. So as you gain share in the secondary part of the business, you also start gaining share in the primary market. New launches are a different, slightly different ballgame. And there it's, you know, we are constantly working on improving our offering so that we become a sort of like a destination site to look for new projects, which is why we launched 99 Acres Shorts. We started with NCR. Now we're taking it to other cities. We're making a lot of changes. If you go look at our platform and check out 99 Acres today, you'll find that the new home experience is very different from what it used to be six, nine months ago. Because new homes need to be marketed. They're not listings. So they can't be sold like listings, which is how we used to do it earlier. They need to be marketed like ads and like projects, which is how all this happens on Meta and Google. So we're making a lot of progress in that area. Our traffic for new homes on the platform is growing. The responses we generate on the platforms for new homes are growing 40-50% year on year. But we are still a tiny part of the market. And that's where the opportunity is. If we can grow this part of the business faster than the resale and rental business, then it can become an even bigger opportunity than what it is today. And we are constantly and we're making good progress in that area. So, now, new homes are also sold through brokers. They're not just sold through builders. They're also sold through channel partners. And increasingly, we are seeing the market move more and more towards channel partners. Because what happens is, it's cheaper to sell through channel partners, because, you know, channel partners tie up with multiple developers. And, you know, and therefore, there's something to sell to everybody. Unlike developers who may just have one project to sell at one point in time, and then the cost of marketing is very high and so on. So, and our sense, our understanding of our business is that, you know, as the business moves more and more towards channel partners, we work well for channel partners, right? Because, you know, we, you know, we are like, you know, you can be on Nine and Acres through the year, you can list multiple projects, you keep getting responses, like a bit like you get a few responses every day. And the ROI then starts to work for you. For developers, you know, it's a little different because developers sell mostly at launch time. And they go big bang. And, you know, at that time, they put up hoardings, they put up, put out newspaper ads, you know, advertise on meta, Google, everywhere. And we get a small fraction. But as more and more business moves towards channel partners, that will actually play to our advantage as a platform. And we're already seeing that in NCR. A lot of the home sales are through channel partners. In Mumbai and Bangalore, increasingly, we are seeing more and more businesses move through channel partners. That seems to be the trend, and that trend will work to our advantage in the long run.

Okay. Thanks. Thanks, Sitesh, again, for the elaborate answers and all the winners.

Thanks, Vivek. Next question from Sapnil from GamePanager. Sapnil, go ahead and ask your question.

Hi, everyone. Thanks for the opportunity. My first question is with respect to the transition itself. Sorry to poke you on that again, but can you help us understand any potential leaders that you just talked about, you know, that we should be looking forward to? I mean, are these someone who is leading the existing businesses of yours? Should we look from that angle?

No, no. So I think we have existing leaders in place for our matrimony business. We have a business head for matrimony. We have a business head for Shiksha. We have a business head for Jobhay. We have a business head for 99 Acres. These people have been with the company for a very long time. They've been running these businesses, and they'll continue to do so. In Nokri, you know, Pavan ran the business for several years. He left a few months back. We have a crack team in Nokri. There are people, somebody running marketing, somebody running sales, somebody running AI, somebody running product. And these are people who, they are veterans. They've been people who've been around for a long time. And they're exceptionally good at what they do. So that's what we meant.

Now, you know, so we're not in a position to identify any one leader right now. Certainly not on this call. But those are internal matters we'll be reviewing in the next few weeks and months.

Got it. Now, coming back to the business, especially the Nokri business. So what I can say is that there was no growth in unique customers. I mean, that number was flat on a YY basis at 46,000. On a QNQ basis also, there was a dip from 49,000. Right. So, so anything to read on that?

Oh, no. So we've changed a lot of these small customers. So, so, you know, there's a 80-20 principled work in Nokri. And, you know, so the top 20% of the customers maybe give us 80% of the revenue, maybe the top 50-60% of the customers give us 97%, 98% of our revenue. So we get a lot of customers who, you know, pay us 1,000, 2,000, 3,000 rupees a month. And they used to buy a single And we have all kinds of these offerings on our platform. We've changed and they used to buy mostly online. These sales used to happen online on the platform. We've changed our approach there a little bit. We've revamped our e-commerce offerings. In the process, we also made them a little more expensive, but I believe they will deliver more value and result in better outcomes for our customers and higher renewal rates over time. So I would not reach too much into that. So our e-commerce revenue is up, right? But the number of customers who are buying has gone down a little bit.

Okay. And did I hear you right that currently there are 2,000 enterprises who are using AIRX and the potential pool of customers where you can take this will be around 40,000 enterprises. Is that how?

Yeah, so there are 2,000 customers who are using ARX. Not all of them are large enterprise customers. Many of them are small consultants as well. Potentially, we should be able to sell ARX to, I don't know, maybe 40,000, maybe 60,000, 80,000 customers over time. Who the hell knows? And most customers who are currently using ARX are trying it out. So they are small customers. They're not spending tons of money on it because they want to sample it. They want to try it out. They want to see whether it makes a difference to their hiring outcomes. And our goal is to drive one more penetration and two more adoption and then, you know, get them to sort of buy more over time.

So potentially, if everything goes right, your AI revenues from these customers will only keep on increasing. Is that the way to provide it?

Provided the ones who are using it right now, renew it next year.

If it's right, we will renew it, and then it will go on.

Got it. And just one thing on your jobway revenues also. I mean, is there any meaningful change to talk about over here? And will it be fair to say that the drag on your margins, the recruitment margins is roughly around 15 to 20 crores a quarter Because of job A investments that you're doing right now, and potentially as in when job A breaks even, this could add to your, you know, overall margins. So 59% margins can go potentially to at least 62% if not more.

See, job A billings last year were 15 crores, close to 15 crores. This year, we are targeting 100% growth in job A. Let's see where we end up. Now, job A burn is around 45 crores a year right now. So it takes away up, I think about 2-3%. from our margin at an overall level in Naukri. I don't see, if revenues keep ramping up, like we expect them to ramp up, then I don't see the burn going up. But, and internal calculations show that, you know, we can break even at about 100, 125 crores of top line in Java. But that may take a couple of years to get there.

Got it. Very useful, Hitech. Thanks a lot for answering your questions and all the best.

Yeah, thanks, Afne. Next question is from Gaurav from Microsoft Capital. Gaurav, go ahead and ask your question.

Yeah, hi. Thanks. Hidesh, a little surprising to see you leave. Sanjeev, just wanted to understand, so you are becoming the group CEO as an interim arrangement, and then you will be looking at external options, or you are like full-time, and so I didn't get it correctly.

There's been no such conversation on the board right now, okay? Having said that, I'm 63 years old, so I cannot continue for 20 years. That isn't happening. But let me go in, let the situation stabilize, and let's see what happens. Thank you.

Kaurav, you are on mute.

No, no, I'm done. I'm done with that.

Okay. The next question is from Kunal from Banyan. Kunal, go ahead and ask a question.

Yeah. Hey, thanks. Thanks for the opportunity. And Hitesh, thank you for all what you've done all these years. As shareholders, we have appreciated the way you created the company along with Sanjeev and the kind of value of delivered. Really happy to see where Naukri is today, especially when this transition of AI happened. And all the best to you for your future endeavors. And we hope that you are glued to the strategy the way you are for many years to come. Just one surprising bit, because when we have looked at Nokri for so many years, you guys have planned much ahead of time for everything, like AI, you've been investing three years from, you know, prior to when AI became the big thing, right? So in this case, we were surprised to see that we have not groomed a CEO, because as, you know, Sanjeev said, because of his age, he will not be able to kind of, you know, be there for next decade or so as the MD and CEO. So was I surprised to see that?

I said 20 years.

I said 20 years. Sure. So that was one slight observation that, you know, unlike the way we have seen you guys in terms of the business planning, that you've always been ahead of, you know, the changes in the industry, etc. This time around in this particular decision, we have not seen that. When it came abruptly to us, perhaps you guys have done it internally. We are not sure about that. That was on your transition, if you can throw some light on. And on the business, just one question on job. Can you spend some more time in terms of competitive intensity there and our progress from last year, like how we are kind of, you know, you spoke about something about it in the last comments, but can you go more deeper on job? Is it a really large opportunity? Can it be really profitable the way the core platform is? Also, if you can touch upon the frequency of the usage of that service by the job seekers and the employers, it will be helpful. Thanks.

Yeah. So firstly, Kunal, thank you for your confidence in us and for your support over the years. The reality of life is it's very hard to find people outside the company who are smarter than the people we have inside the company and people who are smarter than Sajeev. So we are managing, you know, so that's where we are. And for many years, Sanjeev has given me a tough time, and it's my turn now to give him a tough time on the board. You know, just joking, jokes apart. But we have groomed a lot of people over the years, and I think they need to get a chance to sort of, I think they will get even more empowered, and they will get even more space to operate with time. And we've always believed in creating this culture where we are not, you know, hierarchy driven, but we're more ideas driven, data driven, you know, so that continues to be the DNA of the company. The leadership issue will sort itself out, in my view, over time. As far as job is concerned, you know, you know, see, it's not a very large market today. And it's unlikely to be a big market in the next three, four years. But what I can, what we can see is that it's a huge market in terms of volume. It's growing fast. It's slowly moving online. These are early days, but it's strategic for InfoEdge. It can potentially be a very large market, but over a 5, 10, 7, 8-year period, not over a 2, 3-year period. You have to get an early like in every internet business. It takes 10 years to get anywhere. If you don't get an early, then you'll have other players who will take the market away from you, and then it's very hard, right? Right. And so from, and I gave the example of China, but it's a, China is often, you know, China is so large that, you know, it's very hard to compare with China. But in China, Kanzun is a very large player, is a very, very large player. And I think if we can get to even where to 30% or 20% of Kanzun's size in the next 5-10 years, it will be a big, it will be a big achievement. But it is strategic, it's important, and, you know, we need to be in this space. And as it scales, you know, it will be possible to make money. I don't know what the ultimate margins will be like, but like I mentioned earlier, at 120, 130 crores a year, it should be possible to break even, and after that, there will be operating leverage even in this category.

Perfect. Thank you, and all the very best to all of you. Thanks.

Thanks, Kunal. Next question is from Vibhor from Lovama. Go ahead and ask your question.

Yeah, hi. Thanks for taking my question. And Hitesh, I wish you all the best for your future endeavors. Just two quick questions from my side, on the business side. In the IT segment, we have seen a decent growth of around 9% this quarter. This kind of been there with a high single digit kind of growth that we have kind of recorded for over the past four or five quarters also. Now, given that most of the IT companies are literally not hiring, and if I look at the top tech companies, This net headcount addition is barely in those single digits. Some are even flat and negative as well. Do you believe this mid to high single digit growth in the IT segment is sustainable? And if yes, then where is that confidence coming from? Similar question on GCC. Very strong growth in GCC. And we've talked about this also before in our other calls as well. How do you see the pipeline in this GCC segment in terms of maybe new GCCs opening up or the current GCCs are expanding their scope of work, which probably will lead to the mechanical demand? So, will this high teen growth in GCC also expect it to continue?

A very difficult one. Now, you're absolutely right that IT companies are not growing headcount by a lot. They are mostly replacing the people who are leaving. Hiring equity has picked up a little bit, but not by that much. And it's nowhere close to what it used to be. You know, we continue to be the most efficient way to hire for IT companies. And normally, what we have seen in the past is that whenever there's a slowdown, you know, companies tend to cut channels which are more expensive. So, which is why, you know, if you look at our revenue growth from consultants, that has slowed down, actually. So, our revenue growth from consultants was 5% in H1. And some of this growth came because of ARX. Otherwise, it would have been maybe 2-3%. And these are, I'm assuming, and I'm assuming we've lost, you know, clients who used to work primarily for IT services companies. So while IT services companies, you know, maybe they find us more efficient, so they are insourcing more and more hiring. Now, can we sustain this growth rate? It'll depend on what hiring in IT services companies is like going forward. If it accelerates, then our growth rates should improve. And not only will our growth rate with companies improve, but our growth rate with consultants also improve. As far as GCCs are concerned, you know, so there are the smaller GCCs, there are the mid-sized ones, and there are large ones who set up shop many years ago. The large ones are fairly large. So some of the largest GCCs have 30% of their global workforce in India. Now here, if something happens to these companies in the U.S., the Indian GCCs also get impacted. So if there's a big layoff in the US, then, you know, it's a likely very high chance that, you know, people get laid off in India. So what has been happening with GCCs is that we are growing faster with the midsize GCCs, the smaller GCCs, because they're still small, they're still setting up shop in India, maybe just two or three or four or 5% of the global headcount is in India, maybe this can go to 10, 15, 20%, 30% over time. So there's a lot of headroom for growth. And they don't, you know, get impacted by what happens globally. With the larger ones, it's hard to say. So when, like Oracle laid off people in India recently as well, right? So we've been growing in the teens with GCCs. Now, you know, I mean, the number of GCCs is growing in India. Many existing GCCs are setting up more centers. So with them, we'll continue to grow. But I can't be sure of what will happen with the larger GCCs. Right? So, let's see how this plays out.

Yeah, I'd like to add something. I'd like to add something. Yeah. You see, when a company sacks 2,000 and hires 2,000, what shows up to you is net addition zero. But they're actually hired 2,000. Right? And for that hiring, they will use us. Okay? And what is happening is you're letting go of one skill set, hiring another skill set, because the demands of clients are changing. So if you are shifting base towards IT-oriented or AI-oriented sort of hiring, you will hire some people, and you'll fire some people. Net could be zero. And for the hiring of people you hire, you will still use us.

Okay, okay. So basically, we don't get impacted by the firing part, but we definitely benefit from the hiring part.

That's right. We don't hire the users, not the firing users.

Got it, got it. Great, great, great. Thanks for taking my questions, and I wish you all the best.

Thank you very much. Beneath, that was the last question we had for the day.

Thank you, everyone, for joining. Maybe we can conclude this call. Thank you, Desh. Thank you, Sandeep.

Thank you, everyone, for taking your time out. Thank you, everyone.

See you next time. Thanks.