HSBC has upgraded Info Edge (India) Ltd to Buy from Hold, maintaining a target price of ₹1,670, as it believes the company may be at a cyclical low following a weak first quarter.
In Q1FY26, Info Edge reported low billings and weak margins, with its flagship Naukri recruitment platform seeing a slowdown in hiring demand. However, HSBC views this as cyclical, driven by a macroeconomic slowdown, and expects business conditions to improve. It believes low- to mid-teens long-term growth remains plausible for the core business.
The brokerage highlighted that while AI-driven productivity improvements could weigh on IT sector headcount growth in the medium to long term, the volume of follow-on work should help offset this impact. HSBC also noted the strong performance of Info Edge’s other platforms—99acres, Jeevansathi, Job Hai, IIMjobs, and Naukri Gulf—which are growing rapidly and diversifying revenue streams.
HSBC believes the current valuation, at 36x forward PE, offers an attractive entry point given the company’s leadership in recruitment and successful scaling of adjacent businesses.
Disclaimer: The above views are those of the brokerage. Investors should consult a certified financial advisor before making any investment decisions.
