Goldman Sachs maintains a Buy rating on Info Edge India Ltd., viewing the near-term outlook as weak but valuations as attractive

Overview

This report is Goldman Sachs' company research on Info Edge India Ltd.'s 4QFY26 results and future outlook. The report believes near-term demand in the company's recruitment business remains weak, while the education business is also pressured by changes in search traffic, but 4QFY26 revenue met expectations and EBITDA was better than expected, with the core classifieds businesses still retaining double-digit growth potential. Goldman Sachs maintains a Buy rating with a 12-month SOTP target price of Rs1,330.

Core views

The core view is that short-term growth momentum is not strong, but the risk-reward remains attractive. Recruitment business billings growth has slowed and the IT services hiring environment is weak; however, Info Edge's resume database, paywall, and enterprise client relationships create strong barriers to entry, and growth could improve from FY28 if the macro environment improves. The real estate business 99acres has already gained traffic share, with monetization likely to materialize with a lag. On valuation, the standalone business at 11x FY28E EV/EBITDA and 16x P/E is at the low end of Goldman Sachs' India internet coverage and offers better revenue growth prospects than some Indian IT services companies.

Analysis framework

The report starts by comparing actual 4QFY26 results with Goldman Sachs expectations, breaks down billing, revenue, and margin trends across recruitment, real estate, matrimony, and education businesses, and adjusts FY27-29E forecasts by incorporating IT services industry hiring prospects, 99acres traffic share, AI product investment, and changes in employee efficiency. Valuation uses an SOTP framework, applying a DCF and P/E blended valuation to the core classifieds business while incorporating the equity value of Eternal Ltd. and PB Fintech into the SOTP.

Methodology notes

• Valuation methodsSOTP

  Sum-of-the-parts valuation

  Goldman Sachs uses an SOTP framework to estimate Info Edge's value, separately valuing the core classifieds businesses, Eternal Ltd., PB Fintech, and other investment assets, while applying a 15% holding company discount to the corporate structure.

• Valuation methodsDCF / P/E blend

  The core classifieds business is valued using a 50/50 blend of DCF and P/E

  The core business valuation uses a DCF with a 12.5% WACC and 4% terminal growth rate, combined with a 30x target P/E multiple; this P/E multiple was reduced from the previous 37x, reflecting updated comparable company valuations.

• Factor analysisGS Factor Profile

  Growth, financial returns, valuation multiples, and composite factors

  Goldman Sachs' factor framework assesses a stock's relative positioning in the market and industry through metrics such as sales, EBITDA, and EPS growth; ROE, ROCE, and CROCI; as well as P/E, P/B, and EV/EBITDA.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Info Edge India Ltd. (INED.BO)

  Covered listed company and core investment target

  Strengths

  Possesses high barriers to entry, network effects, strong operating leverage, and a diversified portfolio of internet classifieds; revenue still has double-digit growth potential.

  Weaknesses

  Near-term recruitment demand is weak, education and matrimony business growth is slowing, and some growth depends on macro conditions and the external traffic environment.

  Comparison

  Goldman Sachs believes its P/E is already close to that of some Indian IT services companies, but its revenue growth outlook is better, and its valuation is at the low end of India internet coverage.

  Risks

  Persistently weak macro conditions, slower-than-expected recovery in IT hiring, intensifying competition, and AI or technological changes weakening existing business models.

• Recruitment business (Naukri)

  Core operating segment, accounting for about 40% of SOTP

  Strengths

  The resume database is continuously updated and sits behind a paywall, with customer stickiness and data assets providing defensiveness; AI-Rex has reached 1K+ customers and processed 30K recruitment requirements.

  Weaknesses

  Hiring in Tech, IT, and BPM is weak, GCC-related demand is mixed, and 4QFY26 billings growth slowed.

  Comparison

  Goldman Sachs observes it in relation to hiring trends in the Indian IT services industry and net employee additions at leading IT companies.

  Risks

  IT services industry revenue growth below expectations, longer hiring cycles, and unclear long-term effects of AI on hiring volumes.

• Real estate business (99acres)

  Potential driver of growth and improved monetization, accounting for about 5% of SOTP

  Strengths

  Traffic share increased to 52%, and management expects billings to double over the 2-3 years after FY26, with medium-term EBITDA margins of 25-30%.

  Weaknesses

  4QFY26 billings growth was only 2%, affected in the short term by sales organization adjustments and stricter invoice controls.

  Comparison

  Competitors are facing leadership changes and high cash burn, giving 99acres an opportunity to gain market share.

  Risks

  Failure to monetize traffic share effectively, renewed competitive intensity, and a slowdown in real estate advertising demand.

• Matrimony and education businesses

  Non-core operating segments that still affect revenue growth

  Strengths

  The matrimony business still delivered 19% YoY revenue growth in 4QFY26, with billings growth of 21%.

  Weaknesses

  Competition in the matrimony market is intense; education business billings fell 13% YoY in 4QFY26 due to a decline in recommendation search traffic caused by AI-driven changes in Google search behavior.

  Comparison

  Goldman Sachs notes that matrimony and education are not included in the core contribution to its SOTP.

  Risks

  Continued competition, ongoing decline in search traffic, and rising customer acquisition costs.

• Eternal Ltd. / Zomato and PB Fintech

  Important investment assets within Info Edge's SOTP

  Strengths

  Together they account for about 50% of Info Edge's SOTP; Goldman Sachs believes Zomato may still be one of the fastest-growing internet companies.

  Weaknesses

  SOTP value is sensitive to the market price and target price of external holdings.

  Comparison

  Eternal Ltd. is valued using Goldman Sachs' 12-month target price, while PB Fintech is included at current market capitalization.

  Risks

  Downside in Zomato valuation or earnings expectations, and volatility in PB Fintech's market price dragging on SOTP.

Key data

• 12-month target priceRs1,330.00Target price reduced from Rs1,530; current price is Rs961.20, implying 38.4% upside.
• 4QFY26 revenue growth14% YoYRevenue excluding one-offs grew 14% YoY, in line with Goldman Sachs expectations.
• 4QFY26 EBITDA growth29% YoYEBITDA excluding one-offs grew 29% YoY, 7% above Goldman Sachs expectations; under the report's definition, EBITDA grew 37% YoY.
• Forecast revisionsFY27-29E revenue cut by 3-7%, EPS cut by 2-6%Mainly reflects continued headwinds in the recruitment business and a weak outlook for the education business.
• Medium-term growth forecastFY26-28E revenue/EPS CAGR of 13%/15%Goldman Sachs still expects the company to maintain double-digit growth over the medium term.
• Recruitment business billings growth4QFY26 at 10% YoYThe recruitment business accounts for about 40% of SOTP; FY26 billings growth was 10%, below FY25's 15%.
• Real estate business billings growth4QFY26 at 2% YoYThe real estate business accounts for about 5% of SOTP; the slowdown mainly reflects sales organization adjustments and tighter invoice controls.
• 99acres traffic share52%As of April 2026, management believes the traffic share gain will translate into better monetization with a lag.
• Cash balanceRs50 bnAs of March 2026, above Rs48 bn in December 2025.
• FY26 dividendRs8.4/shareFull-year payout ratio was about 49%, of which the final dividend was Rs3.6/share.
• Valuation multiples11x FY28E EV/EBITDA; 16x P/EOn a standalone business basis, Goldman Sachs believes this is at the low end of India internet coverage.
• Key SOTP assumptionsWACC 12.5%; terminal growth rate 4%; target P/E 30x; holding company discount 15%Zomato/Eternal Ltd. and PB Fintech together account for about 50% of Info Edge's SOTP.

Impact & implications

The investment implication of the report is that although Goldman Sachs lowered its medium-term forecasts and target price, maintaining a Buy rating indicates the investment thesis has shifted from short-term earnings acceleration toward low-end valuation, medium-term recovery, and the value of investment assets. In the short term, stock performance will depend more on whether IT services hiring improves, whether 99acres traffic can convert into revenue, whether search traffic pressure in the education business eases, and changes in the market value of Eternal Ltd. and PB Fintech.

Risks

• Continued weakness in IT services revenue growth and hiring demand, causing recruitment business billings to come in below expectations.
• A weaker-than-expected macro environment puts pressure on the company's double-digit growth and stable margin assumptions.
• Intensifying competition, especially if competition in real estate, matrimony, and internet classifieds heats up again.
• AI and technological changes may alter search, recruitment, and traffic acquisition models; the education business is already showing related pressure.
• 99acres traffic share gains may fail to convert into commercial revenue and margins in a timely manner.
• A decline in the valuation of Eternal Ltd. or PB Fintech could drag on Info Edge's SOTP valuation.
• The target price depends on valuation assumptions such as WACC, terminal growth rate, P/E multiple, and holding company discount, and changes in these parameters will affect the conclusion.

What to watch

• FY27 revenue growth in the Indian IT services industry and net employee additions at leading IT companies.
• Whether recruitment business billings growth can improve from 10% in FY26 to about 11% in FY27 as forecast by Goldman Sachs.
• The contribution of new products such as AI-Rex, AI resume generation, and AI mock interviews to customer retention, recruitment efficiency, and revenue.
• Whether 99acres traffic share continues to rise, and whether traffic can convert with a lag into billings and EBITDA margins.
• Whether pressure on recommendation search traffic from Google continues in the education business.
• Whether employee expense growth, headcount changes, and AI-driven productivity improvements can support margins.
• The impact of changes in the market prices and Goldman Sachs target prices of Eternal Ltd. and PB Fintech on SOTP.