19 November 2014
Update | Sector: Technology
Info Edge
BSE Sensex
28,033
S&P CNX
8,382
CMP: INR956
TP: INR1,130
Buy
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Zomato receives funding; valued at INR37b (pre-money)
INFOE IN
113.9
1,015/413
15/27/63
107.9
1.8
~3% upgrade in our target price
Zomato receives INR3.7b of funding, INR1.85b from INFOE, and the remaining
from two other investors.
Zomato is raising funds, a pre-money company valuation of ~INR37b. This will
add ~INR26 to our SOTP.
Our revised SOTP for INFOE is INR1,130. Maintain Buy.
Financial Snapshot (INR Billion)
2015E 2016E 2017E
Y/E MAR
Sales
6.1
7.3
8.7
PAT
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
P/E (x)
EV/EBITDA (x)
EV/Sales (x)
1.8
15.0
27.1
14.8
14.8
63.4
53.6
17.5
2.5
20.9
39.6
14.2
13.3
45.4
40.4
14.3
3.1
25.7
23.1
15.6
15.5
36.9
30.5
11.6
Event: Zomato receives INR3.7b of funding
138.6 154.7 173.8
INFOE announced that it has committed to make an additional investment
of INR1.85b in the shares of Zomato Media Private Ltd (www.zomato.com).
INFOE would be investing along with two other investors in this round of
funding, which aggregates to INR3.7b and includes purchase of shares from
certain existing shareholders.
On disbursement of this amount, the total amount invested by INFOE in
Zomato will be INR3.27b. INFOE’s shareholding in Zomato, post the
aforesaid aggregate fund raising, will be maintained at 50.1% on a fully
converted and diluted basis.
Impact: Zomato valued at INR41b post-money
Shareholding pattern (%)
Sep-14 Jun-14 Sep-13
Promoter
DII
FII
Others
44.5
14.4
31.2
9.9
44.5
14.4
31.3
9.9
52.2
11.4
30.8
5.6
Zomato is raising funds, with a pre-money company valuation of ~INR37b
(~USD600m). This places the post-money valuation of the company at
USD650m+ or ~INR40b. The value attributable to INFOE is ~INR20b. In our
initiating coverage report on INFOE on Nov 4, 2014, we had attributed a value
of ~INR15b to it (INR125/share). This will add ~INR26 to our SOTP, which will
now be INR1,130.
*FII includes depository receipts
Marginal upgrade in target price to INR1,130
We value INFOE using the SOTP valuation method. While recruitment business
remains the cash cow, we expect the real estate portal, 99acres.com, along with
holdings in restaurants classifieds, Zomato.com, and online coupons and
discount marketing platform, Mydala.com, to drive significant value for the
company, going forward. Recruitment contributes ~50% to our target price of
INR1,130. We believe INFOE is a direct and preferred play on the fast expanding
e-commerce opportunity. Our revised target price, after marking to market
Zomato’s valuation, is INR1,130. Maintain
Buy.
Stock Performance (1-year)
Ashish Chopra
(Ashish.Chopra@MotilalOswal.com); +91 22 3982 5424
Siddharth Vora
(Siddharth.Vora@MotilalOswal.com); +91 22 3982 5585
Investors are advised to refer through disclosures made at the end of the Research Report.

Info Edge
Exhibit 1: Valuation: SOTP
Segment
Methodology
Methodology description
We treat INFOE's forward standalone earnings to be coming entirely
from Naukri. Though in reality, more than 100% if earnings is
recruitment as other segments are making losses. We value the
earnings at 20x
Valuation Contribution
(attributable to
(INR per
INFOE - INR b)
share)
Naukri
20x forward
earnings
68.4
570
99acres.com
Median sales multiple of peers such as rightmove.co.uk,
realestate.com.au, zillow.com, zoopla.co.uk
14x forward sales
All trade in a tight sales band of 10-13x
Growth in 99acres.com is expected to be higher than peers
Valuation
ascribed in the
latest round of
funding
Valuation
ascribed in the
latest round of
funding
Latest round of funding valued Zomato at ~USD650m, with INFOE
retaining its 50.1% shareholding based on a fully convertible and diluted
basis
Meritnation raised INR100m from INFOE, which increased the
company's stake in FY13 from 54% to 55.81%
This implies valuation of INR6b, of which 55.81% is ascribed to INFOE
Policybazaar had raised USD20m in May 2014, valuing it at ~USD100m.
INFOE holds 23% in the company
Based on strong growth prospects, and already INR3b monthly GMV,
we estimate Mydala's revenue at USD40m by FY17
24.6
205
Zomato.com
20
171
Meritnation
3.1
26
Valuation
ascribed in the
Policybazaar.com
latest round of
funding
1.4
12
Mydala.com
3x forward sales
While the company could easily enjoy a multiple on the higher side, we
ascribe 3x forward sales.
INFOE's 46% ownership in the same implies valuation contribution of
INR3.3b
JS is the 3rd biggest player in the online matrimony market.
We assume 15% CAGR in revenues and value the franchise at 3x
forward revenues
Canvera raised INR45m from INFOE in latest round of funding, which
increased INFOE's stake from 23% to 26%, effectively pegging the
company's value at INR1500m
3.8
32
Jeevansathi.com
3x forward sales
Valuation
ascribed in the
latest round of
funding
1.6
14
Canvera
Cash On books
Total
1
11
8
92
1,130
Source: MOSL, Company
19 November 2014
2

Info Edge
Financials and valuations
Income Statement
Y/E March
Sales
Change (%)
Employee benefit expense
Advertising and promotion cost
Other expense
EBITDA
% of Net Sales
Depreciation
Interest
Other Income
PBT
Tax
Rate (%)
Reported PAT
Extraordinary Items
Adjusted PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Capital Employed
Gross Block
Less : Depreciation
Net Block
CWIP
Investments
Curr. Assets
Current Investments
Debtors
Cash & Bank Balance
Loans & Advances
Other Current Assets
Current Liab. & Prov
Current Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOSL Estimate
2012
3,771
28.3
1,370
516
442
1,442
38.3
77
20
395
1,740
511
29.3
1,230
0
1,230
46.4
2013
4,372
16.0
1,672
577
626
1,498
34.3
94
25
465
1,844
528
28.7
1,315
-293
1,022
-16.9
2014
5,059
15.7
1,968
662
761
1,668
33.0
174
51
432
1,876
591
31.5
1,285
0
1,285
25.7
2015E
6,080
20.2
2,436
778
883
1,982
32.6
189
14
797
2,575
781
30.3
1,794
0
1,794
39.6
(INR Million)
2016E
2017E
7,262
8,717
19.4
20.0
2,779
3,149
890
1,068
1,021
1,184
2,573
3,317
35.4
38.1
227
266
0
0
1,244
1,367
3,591
4,419
1,087
1,337
30.3
30.3
2,504
3,081
0
0
2,504
3,081
39.6
23.1
(INR Million)
2016E
2017E
1,199
1,199
17,352
19,642
18,551
20,841
4.7
4.7
18,556
20,846
2,051
2,391
1,061
1,327
990
1,064
98
98
3,882
3,882
16,441
19,203
10,173
10,173
85
102
5,790
8,487
242
290
151
151
2,855
3,402
2,750
3,297
105
105
13,586
15,801
18,556
20,846
2012
546
5,198
5,744
2.8
5,747
908
376
531
94
3,666
3,183
0
36
2,985
62
99
1,728
1,496
231
1,456
5,747
2013
1,092
5,563
6,654
4.8
6,659
1,378
471
908
98
3,233
4,267
1,293
45
2,710
103
117
1,847
1,606
241
2,420
6,659
2014
1,092
6,530
7,622
4.4
7,626
1,501
645
857
95
3,775
5,088
2,531
50
2,311
69
127
2,189
1,865
324
2,899
7,626
2015E
1,199
15,424
16,623
4.7
16,628
1,731
834
897
98
3,882
14,139
10,173
71
3,542
201
153
2,388
2,283
105
11,751
16,628
19 November 2014
3

Info Edge
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout % (excl.div.taxes)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Fixed Asset Turnover (x)
2012
11.3
12.0
52.6
1.0
10.4
84.2
79.2
67.2
25.7
18.0
0.0
23.7
26.3
3
6.0
2013
12.0
12.9
60.9
1.0
9.7
78.7
73.4
65.1
22.4
15.6
0.0
21.2
22.6
4
4.3
2014
11.8
13.4
69.8
2.5
23.4
80.5
70.9
58.4
19.3
13.6
0.0
18.0
20.9
4
5.3
2015E
15.0
16.5
138.6
3.0
24.1
63.4
57.3
53.6
17.5
6.8
0.0
14.8
14.8
4
6.1
2016E
20.9
22.8
154.7
4.0
23.0
45.4
41.6
40.4
14.3
6.1
0.0
14.2
13.3
4
6.7
2017E
25.7
27.9
173.8
5.5
25.7
36.9
34.0
30.5
11.6
5.5
0.0
15.6
15.5
4
7.5
Cash Flow Statement
Y/E March
CF from Operations
Cash for Working Capital
Net Operating CF
Net Purchase of FA
Net Purchase of Invest.
Net Cash from Invest.
Proceeds from Equity
Proceeds from LTB/STB
Dividend Payments
Cash Flow from Fin.
Net Cash Flow
Opening Cash Bal.
Add: Net Cash
Closing Cash Bal.
E: MOSL Estimate
2012
874
385
1,259
-1,103
517
-586
0
-1
-48
-49
624
2,038
624
2,663
2013
964
39
1,003
-2,012
988
-1,024
-18
2
-127
-143
-163
2,663
-163
2,499
2014
1,108
261
1,368
-1,024
9
-1,015
-36
0
-255
-291
62
2,499
62
2,561
2015E
1,178
230
1,408
-231
-7,228
-7,459
7,513
0
-480
7,033
981
2,561
981
3,543
(INR Million)
2016E
2017E
1,486
413
1,899
-320
1,244
924
0
0
-576
-576
2,248
3,543
2,248
5,790
1,980
482
2,462
-340
1,367
1,027
0
0
-791
-791
2,698
5,790
2,698
8,488
19 November 2014
4

Info Edge
NOTES
19 November 2014
5

Disclosures
This research report has been prepared by MOSt to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies). This
Info Edge
report is for personal information of the select recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement to
invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been
furnished to you solely for your general information and should not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into
account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable
for their particular circumstances and, if necessary, seek professional advice. The price and value of the investments referred to in this material and the income from them may go down as well as up, and
investors may realize losses on any investments. Past performance is not a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.
MOSt and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business
relationships with a significant percentage of the companies covered by our Research Department Our research professionals provide important input into our investment banking and other business selection
processes. Investors should assume that MOSt and/or its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that
the research professionals who were involved in preparing this material may participate in the solicitation of such business. The research professionals responsible for the preparation of this document may
interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting market information. Our research professionals are paid in part based on the
profitability of MOSt which include earnings from investment banking and other business. MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from
maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an
officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals or affiliates may provide oral or written market commentary or trading
strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with
the recommendations expressed herein. In reviewing these materials, you should be aware that any or all o the foregoing, among other things, may give rise to real or potential conflicts of interest . MOSt and
its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in
any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or
lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its
affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to
hold MOSt or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The
information contained herein is based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent MOSt’s interpretation of the
data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not
intended to be a complete statement or summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, MOSt
and/or its affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its
affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. MOSt or any of
its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of
merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its
contents.
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of
Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Disclosure of Interest Statement
Analyst ownership of the stock
INFO EDGE
No
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or
will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible
for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.
Regional Disclosures (outside India)
For U.K.
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to
law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to
which this document relates is only available to investment professionals and will be engaged in only with such persons.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States.
In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state
laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein
are not available to or intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has
entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer,
MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research
analyst account.
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors
Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore
to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Anosh Koppikar
Kadambari Balachandran
Email:anosh.Koppikar@motilaloswal.com
Email : kadambari.balachandran@motilaloswal.com
Contact(+65)68189232
Contact: (+65) 68189233 / 65249115
Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931
For U.S.
For Singapore
Motilal Oswal Securities Ltd
19 November 2014
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
6