There has been a decline in revenues but a better expansion on the margins relatively speaking. What were some of the factors at play this quarter?
Q3 was on expected lines. For us, the billing growth came back very strongly. We were down to minus 1% as a company in the end which is a substantial improvement over both Q1 and Q2. The recruitment business was down 4% in terms of billing, 99acres was down about 3.5%, Jeevansathi grew by about 17% and Shiksha grew by 27%. Things are getting back to normal. In fact, in December, we saw positive growth in the
business in terms of billing. Hopefully, Covid is now behind us and the next quarter or this quarter should be good.
How much have the billings improved in the third quarter versus what you saw in Q2? What could you give us as an outlook on billings going forward?
The billings are a lead indicator in our business because we collect our money in advance and revenue follows with a lag. The decline in revenue in Q3 was on account of core billings in Q1 and Q2. The Q3 billings are almost back on track and sequentially, billings grew by about 20% quarter on quarter. Q4 is normally our biggest quarter and last year Q4 was muted because of the lockdown which hit us in the last 7-10 days of March. We are hoping that Q4 this year will be a lot better than Q3.
Also Cocis seems to be behind us. So fingers crossed but in both Naukri and 99 acres we expect Q4 to be a lot better than Q4 and if all goes well, we should hit last year’s numbers and can exceed them but a lot will depend on how the Covid situation plays out in the next few months.
Your revenues in real estate have declined. While there has been a recovery in many pockets, states like Maharashtra for instance and many other tier II and III cities as well, what do you think is reflecting in the revenues right now?
Like I said, December was a good month for us. Of course, in Q3 as a whole, billings were flattish or down a couple of percent over last year, but in December, we grew in Naukri. In 99Acres also, we had a good December. The real estate business in 99Acres has many parts to it. It is a resale piece and it is doing quite well for us and traffic is going through the roof. Inquiries are 40% year on year but it is a tiny part of our business.
The new home business has been a little slow because new launches were impacted because of Covid and what you are seeing in terms of pick up in Maharashtra, etc, is mostly on account of resale transaction and some old sort of new homes which are already under construction. But the new launch business was impacted because of Covid.
The rental business has been slow to some extent because of Covid and so has the commercial business. But our sense is that almost all these segments will bounce back nicely in Q4. We are already seeing that in terms of traffic, in terms of inquiries and in terms of dealers coming back. Some builders have also announced launches. Let us see how it plays out. Hopefully Q4 this year in 99Acres will be better than Q4 of last year.
While the recent deals in Zomato have suggested valuations over $3 billion, can we expect the Zomato IPO this year?
Definitely the business has been looking up for Zomato. Quarter on quarter volumes are up and so is the average order size. The burn is down. Of course, the company wants to go for an IPO at an appropriate time. We have been talking about it but at what point in time and at what valuation, will be decided by the Zomato board. It is an independent company, the board will take a call. It would be unfair of me to comment on that.
What about Policy Bazaar? How are you looking at business trends there? Any word on that IPO?
Policy Bazaar again has seen a strong recovery, especially on the insurance side. The insurance side of the business continues to do very well. The paisa bazaar business was very adversely impacted because of Covid and the lockdown, but that also is slowly coming back.
On the whole, the company is doing very well, especially the insurance business. They also want to IPO at an appropriate time but it is for their board to decide what time, what valuation and when they want to hit the market. But both Zomato and Policy Bazaar would like to IPO at an appropriate time.
