Info Edge - Stock Price May Have Run Up Ahead Of Fundamentals; Downgrade To Hold: ICICI Securities

ICICI Securities Report

Info Edge India Ltd.’s stock price has appreciated more than 70% in the last nine months, led by the hope of recovery in IT hiring and superior performance of listed portfolio stocks (Zomato and PB Fintech).

At this price, we believe the risk-reward ratio for the stock is unfavorable (0.7:1). Also, latest JobSpeak data indicates IT hiring may take longer to recover than we had built in.

We have cut revenue and Ebitda estimates for FY25/26E by 2%/5% and 2%/6%, respectively. We have also rolled forward by three months keeping our target multiples unchanged.

Resultantly, our target price is now Rs 7,275 (earlier Rs 6,993). In terms of historical valuation (two year), the stock is now trading at mean enterprise value/Ebitda multiple compared to -1SD 9 months back.

Given limited clarity on the timing of IT hiring recovery and meaningful multiple rerating, we downgrade the stock to Hold.

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