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What further differentiates the company from its counterparts in the industry is its conservative and cautious approach towards business. One instance of this can be seen in its overseas expansion strategy, which it has restricted just to countries in the Gulf region in the form of naukri.com Gulf. So what’s the reason behind this? As an analyst justifies, “In India, Info edge started fifteen years back, but it’s just over the past five years that the company has grown at a much faster rate. And thus it wants to be more cautious before taking the plunge into newer oceans...” Even Oberoi agrees to it wholeheartedly as he quotes, “Our investments are based on the business potential. We review our new businesses on a quarter-to-quarter basis. We see what is working and what is not and we put more resources on issues that are getting profitable.” Indeed, for Info Edge, there seems to be no hit-and-trial methodology!
When it comes to inorganic growth, the company is always open to newer acquisitions but logically, at the right price and in the right space. Thankfully, here is a player who is not blind to realities and getting double-sized overnight! So is everything rosy for the online entity? Well, not really. With 40% of its revenues coming from the IT industry, there is somehow a feeling of over reliance on one sector that may finally prove the poison pill for the company. Secondly, the company for long has been unsuccessful in replicating the success of naukri.com in all other verticals like – matrimonial (Jeevansathi.com), real estate (99acres.com) et al as Ambarish Raghuvanshi, CFO, Info Edge confesses, “Another challenge for us is to raise the bar for our mid-sized businesses and increase their size to what naukri.com is today...” However, the brighter part of this dark picture is that despite the global downturn, the company’s revenues have been least affected. For instance, despite the real estate prices falling, 99acres.com has grown appreciably - a revenue growth of 98.9% during Q2, 2009 as compared to the same a year ago. Moreover, its other arm – Jeevansathi has recorded a revenue growth of 40.3% during Q2 2009, certainly boosting the company’s potential of earning more by the day, downturn or no downturn. What’s a sweeter surprise? When companies across the board are focussing on slowing down and decreasing production or selling off assets, Info Edge has its eyes set on expansion. As an analyst avers, “Online classified markets earn a lot due to heavy spending by various sectors, with education and job being a major source.” Surely, when it comes to the job market, Info Edge has already taken the lead and, “when it comes to the education market, it has its hands on,” adds an industry expert.
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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