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Investing.com - HSBC upgraded Info Edge India Ltd. (INFOE:IN) from Hold to Buy and set a price target of INR1,670.00, implying approximately 25% upside potential.
The upgrade comes as HSBC attributes the billing slowdown in Info Edge’s Naukri business to a cyclical macroeconomic slowdown rather than structural issues. The bank believes that while artificial intelligence might impact headcount growth in the medium to long term, increased follow-on work volume should offset negative effects, particularly in the IT services sector.
HSBC notes that Info Edge is successfully developing other businesses including 99acres, Jeevansathi, and recruitment platforms like Job Hai, IIMjobs, and Naukri Gulf, which are showing strong growth. The firm expects ongoing investments and scale in these businesses to help Info Edge maintain or improve its mid-teens growth profile.
The bank views Info Edge favorably for its continued leadership in the recruitment business and for successfully scaling other leading businesses such as 99acres and Jeevansathi. HSBC considers current growth concerns to be temporary.
HSBC finds the core business valuation attractive at 36x forward price-to-earnings ratio, which contributed to the rating upgrade and the new target price of INR1,670.
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