InfoEdge Results: EPS down 4%, Stock Up 4%

4 comments Written on April 30th, 2010 by
Categories: InfoEdge

There is only one rule for the NAUKRI stock. If they announce bad results, the stock goes up.

image

For the last two years, the Trailing Twelve Month EPS has been between 20 and 23 and it is now near the low of the range. The profits have hardly grown much, even in a job market that has seen a substantial recovery, or so we are told.

image

This time, the cash flows are negative. But that’s just a little accounting thing – they’ve moved from fixed deposits to mutual funds (the latter being “investments” and therefore not cash equivalents). Overall, they have 107 cr. in MFs and 277 cr. in FDs, making for a cashable hoard of 384 cr, up from 340 cr. last year. With 2.73 cr. shares, that’s Rs. 140 per share in just cash.

The stock though, is at Rs. 955, up Rs. 40 today, or 4.4%. While it is strange, consider this – the volume traded was a piddly 3,881 shares, for a total turnover of 36 lakhs. Heck, anyone can manipulate this stock up or down with such low volume, so I shouldn’t even harp on the 4% increase.

Scary bits: insiders are selling hand over fist. Kapil Kapoor, the non-exec Chairman, has sold 68,000 shares just this quarter. That should have netted over 4 crores, and he’s sold another 70,000 last quarter. Sandeep Murthy, another big-name director, has sold around 50,000 shares in the year. The plus point is that management – Sanjeev Bikhchandani, Hitesh Oberoi etc. have not sold their shares.

Naukri’s been doing some improvements to their sites lately, though I’ve not used their main site (naukri.com) too much, or the jeevansathi type portals. I do use 99acres.com a fair bit, and I’ve seen allcheckdeals too. But I doubt it’s worth the 45 P/E they are getting now, especially since they have shown an EPS growth of about zero in the last eight quarters.

And it’s equally important to say that every time I have dissed their EPS growth, the stock has gone up, so if you’re the quant type, this is probably a great time to buy. (I don’t have any holding and don’t plan to either)

Related Posts Plugin for WordPress, Blogger...
About the Author:
http://www.capitalmind.in
The man behind Capital Mind. Deepak is a co-founder at MarketVision, a financial knowledge company. Deepak also provides data research and consulting services, and now lives in Bangalore. Connect with him at deepakshenoy@gmail.com.

4 comments “InfoEdge Results: EPS down 4%, Stock Up 4%”

>Actually EPS was up if you ignore the impact of the one time write off on account of the haircut on Studyplaces

>I think the studyplaces dead DID have a real impact? In any case, if we're going to remove bits and pieces let's go the whole hog.

If you remove the impact of the Studyplaces haircut (3.7 cr. minus the 40% tax they seem to have saved on it = 2.2 cr) and go down to the consolidated results for the year because that is more real than anything else, and let them participate in the profits and losses of subsidiaries, the EPS will STILL be down 6% (it's down 8% right now)

In fact, it gets worse. They haven't really considered the impact of dilution using stock options. There are 26 lakh shares – or a 10% dilution – in their Stock Option accounts. That's another EPS impact.

On the positive side, they have collected Rs. 53 cr. as revenue that they account for in a staggered way (i.e. over the term of the contract even if it's paid upfront) which is a good cushion. At current margins of 20% they are nearly guaranteed an EPS of Rs. 4 next year…

>This one is a really Nice Blog…

>Insiders selling always makes me nervous, and with such high P/E valuations, it makes me wonder if this is a good candidate to start setting up a short?