14 Apr “Why Growth Investors Should Keep an Eye on this Large Cap Stock”

“Investing in the Future: Large Cap Stock with Growth Potential”

A recent report suggests that the Nifty is on a path of recovery, but certain segments are seeing a faster recovery compared to others.

It seems that after facing some pressure in the fourth quarter of FY23 , the bulls are back in action in the first two weeks of FY24. Despite bearish and volatile conditions, there are some large cap stocks that have managed to outperform the market in the last month.

This can be measured in three ways – either the stock hasn’t fallen as much as the Nifty, it has moved up while the Nifty has gone down, or it has gained more or equal to what the Nifty has gained when the index witnessed a recovery.

There are a couple of reasons why some large cap stocks are able to outperform the market despite bearish and volatile conditions.

Firstly, there may be some fundamental developments taking place in the company or sector, which is ensuring an outperformance. Secondly, it’s possible that these large stocks had already seen a correction before the markets experienced a bearish trend and are now consolidating before attempting to move upward again. In either case, these stocks are showing resilience and strength in the face of challenging market conditions.

Here is one such stock which in the past one month gave positive stock returns; Whether this will continue to move up faster as the market recovers on a sustained basis remains to be seen

Also Read: Why This Fundamentally Strong EV Stock is on a Bullish Run in a Bear Market?

Info Edge (India) Limited

Info Edge (India) Limited is an Indian multinational company based in Noida, Uttar Pradesh.

-The company was founded in 1995 by Sanjeev Bikhchandani and has since become one of the largest internet companies in India.
-Info Edge operates several online businesses in various industries, including recruitment, real estate, education, and matrimony.

-Info Edge has also invested in several other startups in India and abroad,
-including PolicyBazaar, ZippServ, Happily Unmarried, and ShopKirana.

-Info Edge is a market leader in several of its key verticals, such as job search and real estate.

-This strong market position gives the company a competitive advantage and allows it to generate strong revenues and profits.

Some of the popular brands owned by Info Edge include:

Naukri.com: It is India’s largest job portal with over 60 million registered users and 4,75,000 corporate clients.
99acres.com: It is one of India’s leading online real estate platforms with over 10 million registered users.
Jeevansathi.com: It is one of India’s leading matrimony platforms with over 5 million registered users.
Shiksha.com: It is a leading online platform that connects students with educational institutions and provides information on courses, exams, and scholarships.

Fundamentals:

• Market Cap  Rs 49,354 Cr.
• Current Price₹ 3,820
• Book Value₹ 1,102
• Stock P/E 68
• Industry PE61.3

Financials:

• ROCE 24.3 %
• ROE 21.8 %
• OPM 13.6 %
• Debt Rs 136 Cr.
• Debt to equity 0.01
• Qtr Profit Var-91.3 %
• Qtr Sales Var39.9 %

Diversified revenue streams:

Info Edge generates revenue from a variety of sources, including online classifieds, recruitment services, and advertising. This diversification helps to mitigate risks associated with fluctuations in any one market or segment, and provides stability to the company’s financials.

Focus on innovation:

-Info Edge has a strong culture of innovation and has been investing heavily in technology to enhance user experience and drive growth.

-For example, the company has recently launched a chatbot for its job search platform, which uses artificial intelligence to help job seekers find relevant jobs and employers to find suitable candidates.
-This focus on innovation should help the company stay ahead of the competition and maintain its market leadership position.

Growing internet penetration in India:

-India’s internet user base has been growing rapidly over the past few years, and is expected to reach over 900 million by 2025.
-This presents a significant growth opportunity for Info Edge, as more and more consumers shift their offline activities online, such as job search, real estate, and matrimony.

Strong management team:

-The company’s founder and executive vice chairman, Sanjeev Bikhchandani, is a well-respected entrepreneur and investor in India’s start-up ecosystem.

The Top 3 investments of Info Edge:

1. Zomato

• Early investor: Info Edge has been an investor in Zomato since its early days, providing the company with funding and support to grow its business.
• Significant stake: Info Edge currently holds a 17.14% stake in Zomato, which is valued at over Rs. 22,000 crore.
• Leading foodtech platform: Zomato is a leading online food ordering and delivery platform in India, with a presence in over 24 countries.
• Public listing: Zomato went public in July 2021, which has provided Info Edge with an opportunity to partially monetize its investment and potentially generate significant returns for its shareholders.

2. PolicyBazaar

• Online insurance aggregator: PolicyBazaar is an online insurance aggregator in India that allows customers to compare and buy various insurance policies online.
• Significant stake: Info Edge currently holds a 13.3% stake in PolicyBazaar, which is valued at over $450 million.
• Fast-growing insurtech industry: PolicyBazaar has seen significant growth in recent years, benefiting from the growing demand for digital insurance solutions in India.
• High valuation: In a funding round in 2021, PolicyBazaar was valued at over $3.5 billion, highlighting the potential for significant returns for Info Edge.

3. Happily Unmarried

• Lifestyle brand: Happily Unmarried is a lifestyle brand in India that offers a range of products such as clothing, accessories, and home decor.
• Investment through IE Venture Fund I: Info Edge has invested in Happily Unmarried through its IE Venture Fund I, which is focused on early-stage investments in internet and mobile technology start-ups in India.
• Strong revenue growth: Happily Unmarried has seen strong revenue growth in recent years, with the company’s revenue growing at a CAGR of 47% between FY18 and FY21.
• Diversification of investment portfolio: The investment in Happily Unmarried has helped Info Edge to diversify its investment portfolio beyond its core online classifieds business and gain exposure to the fast-growing consumer products industry in India.

Here are some specific risks involved with investing in Info Edge:

Intense competition:

-Info Edge operates in a highly competitive market, with numerous established and emerging players vying for market share.
-The company faces competition from large players such as Google and Facebook, as well as from smaller start-ups. –This intense competition could result in a loss of market share and lower profitability.

Regulatory risks:

The online classifieds industry in India is subject to various regulations, such as
-data privacy laws,
-consumer protection laws, and
-competition regulations.

Changes in regulatory requirements or legal challenges could impact the company’s business operations and financial performance.

Technological disruptions:

-Technology is evolving rapidly, and new innovations and disruptions could impact Info Edge’s business model.
-For example, the emergence of new technologies such as blockchain or artificial intelligence could disrupt the online classifieds industry and reduce demand for the company’s services.

Dependence on key verticals:

-Info Edge generates a significant portion of its revenues from a few key verticals, such as job search and real estate.
-A decline in demand for these services could have a significant impact on the company’s financial performance.

Dependence on key investments:

-Info Edge has made significant investments in start-ups such as Zomato and PolicyBazaar, which represent a significant portion of its valuation.
-A decline in the performance of these investments could impact the company’s financial performance and stock price.

——————-
This electric vehicle EV stock is on the rise to reach an all-time high (ATH) in the current falling market. Here is the reason why…Read More

“Why This Fundamentally Strong EV Stock is on a Bullish Run in a Bear Market?”

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies are their own and not that of the website or its management. Aceink.com advises users to check with certified experts before taking any investment decisions.