Info Edge (India) Limited (NAUKRI.NS) Earnings Call Transcript & Summary

Good evening, everyone. I am Anand Bansal, joined by my colleague, Vineet Ranjan. Thank you for joining us. We'll wait for a couple of minutes so that more people can participate and log in. Vineet, we currently have 80 people. Over to you to get us started. Thank you so much.

Thank you, Anand. Good evening, everyone. Thank you for joining the call. Welcome to Info Edge India Limited Earnings Conference Call for Quarter 2 FY '26. Joining us today from management, we have Mr. Sanjeev Bikhchandani, Founder and Vice Chairman; Mr. Hitesh Oberoi, Co-Promoter and Managing Director; and Mr. Chintan Thakkar, Director and CFO. Before we begin, I would like to draw your attention to the detailed disclaimer for good order sake. Kindly note that this call is being recorded. [Operator Instructions] I will now hand over the call to Hitesh for his opening remarks. Over to you, Hitesh.

Good evening to everyone, and welcome to Info Edge's earnings call for the second quarter of FY '26. As always, we'll begin with an update on the stand-alone financial performance, then cover the performance of each segment, along with our commentary on each business. And of course, we'll have time for Q&A in the end. For the stand-alone business in Q2 of FY '26, billings were INR 729 crores, a Y-o-Y growth of 12%, and revenue was INR 746 crores, a Y-o-Y growth of 14%. Billings and revenue, including Zwayam and DoSelect were INR 752 crores and INR 769 crores, a Y-o-Y growth of 12% and 14%, respectively. Operating profits at a stand-alone level grew by 7% Y-o-Y to INR 268 crores, and the operating margin stood at 36%. Operating profits, including Zwayam and DoSelect grew by 11% Y-o-Y to INR 270 crores, and the operating margin was 35%. The stand-alone business generated cash from operations before taxes of INR 293 crores in Q2 of FY '26, a Y-o-Y growth of 12%. Cash from operations, including Zwayam and DoSelect was INR 302 crores, a Y-o-Y growth of 14%. The cash generation from the recruitment business was INR 325 crores. The non-recruitment businesses at an aggregate level incurred cash losses of INR 6 crores in FY '26, a Y-o-Y cash reduction -- loss reduction of 62%. For the stand-alone business in H1 of FY '26, billings were INR 1,373 crores, a Y-o-Y growth of 12% and revenue was INR 1,482 crores, a Y-o-Y growth of 14%. Billings and revenue, including Zwayam and DoSelect were INR 1,416 crores and INR 1,526 crores, a Y-o-Y growth of 12% and 15%, respectively. Operating profits at a stand-alone level grew by 8% Y-o-Y to INR 518 crores, and the operating margin stood at 35%. Operating profits, including Zwayam and DoSelect grew by 12% to INR 521 crores, and the operating margin was 34% in H1 of FY '26. The stand-alone businesses -- business generated cash from operations before taxes of INR 472 crores in H1 of FY '26, a Y-o-Y growth of 8%, and cash from operations, including Zwayam and DoSelect was INR 485 crores, a Y-o-Y growth of 11%. The cash balance of Info Edge, including wholly-owned subsidiaries at the end of September 2025 stood at INR 4,823 crores. The Board has proposed an interim dividend of INR 2.4 per share. Headcount of the company as of September '25 end was 6,238. There is an exceptional gain of INR 5,200 crores in Q2 of FY '26 related to Info Edge's holding in PB Fintech. Following NCLT approval for the amalgamation of MakeSense Technologies with PB Fintech, Info Edge's 6.5% stake held through MakeSense will now be directly held by Info Edge in the mother company. From an accounting perspective, the difference between the investment cost and fair value on the order date has been recorded as an exceptional gain in the P&L. Subsequent mark-to-market changes in PB Fintech's value will be reflected in other comprehensive income similar to the treatment for Eternal. Now moving on to the segmental performance and starting with the recruitment business. In Q2 of FY '26, stand-alone recruitment billings grew by 11% to INR 545 crores, and revenue grew by 13% to INR 558 crores. The operating profit for the stand-alone recruitment segment improved by 9% Y-o-Y to INR 312 crores, and the operating profit margin was 56%. Zwayam and DoSelect combined were also profitable in Q2 of FY '26 vis-a-vis loss-making in Q2 of FY '25. The operating profit for the recruitment segment, including Zwayam and DoSelect, improved by 13% Y-o-Y, and the operating profit margin was 54%, a 20-basis-point improvement year-on-year. Cash generated from the recruitment operation was INR 325 crores, a Y-o-Y improvement of 13%. In H1 of FY '26, the stand-alone recruitment billings grew by 10% to INR 1,015 crores and revenue grew by 14% to INR 1,100 crores. The operating profit for the stand-alone recruitment segment improved by 10% Y-o-Y to INR 596 crores, and the operating profit margin was 54%. The operating profit for the recruitment segment, including Zwayam and DoSelect, improved by 13% Y-o-Y and the operating margin -- profit margin was 52%. Cash generated from recruitment operations was INR 521 crores, a Y-o-Y growth of 9%. Key operating highlights. Y-o-Y billings growth of 11% in Q2 was slightly better than Y-o-Y growth of 9% witnessed in Q1. Billing for tech, IT and BPM segments combined grew by 7% Y-o-Y. Other sectors combined grew at 11%. GCCs grew at 18% and recruitment consultants grew at 9%. The recruiter and job seeker engagement metrics such as CV searches, CV views, CV additions, modifications, traffic, et cetera, continue to grow well during the quarter. IIMJobs, Hirist and Naukri Fast Forward witnessed some moderation in billings growth in Q2 as we are experimenting with different go-to-market strategies in these businesses. Naukri Gulf's billings continue to grow well at 22% year-on-year. Job Hai, which is currently operating primarily on a freemium model and focused on select markets, maintained strong platform metrics and continue to generate revenue. On the Jobseeker front, the Naukri platform now hosts approximately 111 million resumes and added an average of 26,000 resumes daily during Q2 of FY '26. Marketing expenses in Naukri were significantly lower in Q2 compared to Q1 and were flat on a Y-o-Y basis in Naukri. We continue to make investments in Job Hai, though, as it scales up its monetization efforts. And therefore, the operating profit margins, which saw some moderation in Q1 to 53%, improved by 3.3 basis points to 56% in Q2. Excluding Job Hai investments, the recruitment margins were over 58% in the second quarter. In summary, though, the hiring environment remains uncertain as is evident from the JobSpeak Index as well. Despite this, we were able to achieve some improvement in recruitment billings. We remain cautiously optimistic about growth in the quarters ahead. Very hard to predict how the market will shape or will evolve. Moving on to the Real Estate segment. In Q2 of FY '26, billings grew by 14% to INR 122 crores, and revenue grew by 13% to INR 115 crores. Operating losses were INR 23 crores, whereas the business generated cash from operations of INR 2 crores in Q2 of FY '26. In H1 of FY '26, billings grew by 15% to INR 217 crores and revenue grew by 12% to INR 226 crores. Operating losses were INR 42 crores and cash losses from operations were INR 17 crores in H1 of FY '26. Moving to key operating highlights of 99acres. In Q2, billings growth remained at a mid-teen level. The secondary business grew well, whereas growth in the primary business was very modest. We continue to invest in this business, and we continue to see massive gains in traffic share in Q2 as well. We've been expanding our traffic share by almost 0.5% to 1% each month for the last almost 12 months now. Our traffic share for the last 3 months has averaged between 47% to 50% while the other 2 players are in the mid-20s range. Also traffic share growth -- we believe traffic share gains will ultimately translate into billing growth, but with some lag. Customers need to experience increased responses and inquiries over a period of time for them to shift more spending to the platform. Q2 billings were primarily driven by customer count growth and broker billings continue to grow faster than developer billings. Live new project listings of the platforms grew 23% Y-o-Y, while live resale and rental listings from brokers grew 37% Y-o-Y in Q2. App and web traffic continued to grow, leading to an increase in inquiries across all categories and in fact, a very healthy increase in inquiries across all categories. With healthy traffic share -- time share gain and mid-teen billings growth in Q2, we believe we grew faster than our competitors and continue to gain market share for the -- for almost 3 or 4 quarters now. Moving over to the Matrimony business. In Q2 of FY '26, billings grew by 29% to INR 34 crores and revenue also grew by 29% to INR 34 crores. The business maintained breakeven at both the operating level and cash from operations in Q2 of FY '26. In H1 of FY '26, billings grew by 33% to INR 68 crores and revenue also grew by 29% to INR 68 crores. The business generated an operating profit of INR 60 lakhs, and cash from operations of INR 6 crores in H1 of FY '26. In Q2, the Jeevansathi business maintained its growth momentum driven by monetization initiatives undertaken over the past 12 to 18 months. The focus remains on Hindi-speaking markets where we continue to have a strong presence and see significant growth potential. Investments in these markets are delivering encouraging results, particularly in terms of user acquisition growth. AI is being leveraged to drive efficiencies in creative development and other related business processes as well as to enhance both product experience and improve pricing yield. Marketing expenses have increased year-on-year over the last few quarters. The business over the past few quarters, the business intends to stay within this range while continuing to operate at or near breakeven levels, subject to changes in competitive intensity. Moving on to the education vertical, Shiksha. In Q2 of FY '26, billing was INR 28 crores, a Y-o-Y growth of 13%, and revenue grew by 18% to INR 39 crores. The business delivered an operating profit of INR 2 crores and cash losses from operations were INR 8 crores in Q2 of FY '26 versus INR 11 crores in Q2 of FY '25. In H1 of FY '26, Shiksha billings were INR 73 crores, a Y-o-Y growth of 10% and revenue grew by 18% to INR 89 crores. The business delivered an operating profit of INR 8 crores and cash losses from operations of INR 6 crores in H1 of FY '26. The 13% billing growth in Shiksha was across both the domestic and study abroad business. Domestic private universities and colleges continue to grow and expand their course offerings. This presents an opportunity for Shiksha to further expand its footprint. Shiksha enables students to explore colleges and courses aligned with their preferences. This growing shift from Google search to AI chatbots along with Google's rollout of AI summaries has, however, led to a decline in traffic in Shiksha over the last couple of quarters. And this is something we continue to monitor, and we are working on strategies to mitigate this. We continue to invest more in creating comprehensive student-friendly content and building deep domain expertise in this segment. The business is strengthening its domestic counseling capabilities, driving higher conversions from client responses to student applications to help mitigate the potential impact of AI on traffic. On the AI front, our current focus on leveraging AI is centered around the following key priorities: one, enhancing search quality, user personalization and productivity across existing platforms; two, building new AI-powered features that improve user experience and engagement; three, creating entirely new products and monetization levers powered by AI; and four, leveraging AI internally to improve operating efficiency, the speed of decision-making and execution agility. In line with this, we continue to upgrade our database product in Naukri with AI and machine learning, resulting in improvements in recruiter productivity. Similarly, new AI models for job search and recommendations have given -- have driven a 15% to 20% year-on-year improvement in job seeker engagement. Across the businesses, we are now using GenAI tools to create content and a lot of our -- and some of our recent marketing campaigns are generated in-house and AI-driven. Overall, our AI initiatives are early days. Of course, we've been investing in machine learning for a long time. Early days in terms of leveraging generative AI and Agentic AI, but we continue to invest in the same. Moving to consolidated financial highlights. At the consolidated level, the net sales for the company stood at INR 805 crores in Q2 of FY '26 versus INR 701 crores for Q2 of FY '25. The total comprehensive income was INR 6,070 crores in Q2 of FY '26 versus INR 8,170 crores in Q2 FY '25. Profit before tax without exceptional items in Q2 of FY '26 was INR 404 crores compared to INR 335 crores in Q2 of FY '25. To summarize, the recruitment business remains resilient as billings growth improved slightly in Q2. Engagement on the platform remained healthy, and we continue to deepen our presence across GCCs, SMBs, Tier 2, Tier 3 cities and other non-IT sectors to broaden our customer base. Our niche and adjacent platforms, including IIM Jobs, Hirist, Naukri Gulf, Naukri Fast Forward, DoSelect, AmbitionBox and Job Hai are doing well and will hopefully unlock new opportunities -- growth opportunities in the years to come. The non-recruitment businesses continue to grow steadily and reduce cash losses during the quarter, reflecting consistent execution and improving efficiency. In 99acres, we continue to gain market share, supported by sustained investments in marketing and platform improvements, content quality and customer acquisition. Our efforts remain focused on further strengthening our leadership in the resale and rental and commercial and new home segments while improving our offerings in the new launch space. In Jeevansathi, top line growth was supported by the continued success of the freemium model, enhancements to the matching -- to our matching algorithms and ongoing efforts to drive monetization. The business continued to break even in this quarter as well. Shiksha business maintained a steady growth trajectory and continue to operate profitably. Across all our platforms, we are progressing well on the deployment of AI and machine learning to improve customer experience through smart search, smarter recommendations, smarter pricing, superior creative development and new feature rollouts. Our healthy cash flows and strong results remain our core strength. These enable us to invest in long-term growth initiatives to respond to competitive dynamics and evaluate opportunities that create sustainable shareholder value. Thank you all for joining the call, and now we are happy to take any questions.

Thank you, Hitesh. We can start with the Q&A session. Anand, over to you. I guess we already have a few questions in the queue. We can maybe start.

[Operator Instructions] We already have a few questions I'm going to take. So first question is from Vivekanand from AMBIT.

My first question is -- first set of questions are on recruitment. So Hitesh, last time when you had outlined your commentary in the conference call, you said that there was some spillover of demand from 1Q into 2Q. Yet if I look at the first half billing growth, it has moderated to around 10%, down from 15% in FY '25. I know you mentioned about being cautiously optimistic. Could you elaborate on this outlook and also the drivers here? That's question one. I'll ask more after this answer.

Yes. It's a very modest hiring market and also things are -- continue to be unpredictable. It's very -- and uncertain, very hard to say how things will change -- will evolve going forward. Clearly, it's not a market where -- it's not a hot market, and it's not a market where companies are hiring like they used to hire maybe 3 years ago or 2 years ago. And so our sense of the situation on the ground right now is that we have to fight for all our renewals. We have to fight for upgrades. We have to fight for sales. We have to fight -- we're trying very hard to acquire new customers, but new customers start small. They don't start -- we are sort of -- we have a diversified portfolio now. We are trying to get customers to sample new products, which we've launched over the last few years. So it's not easy to take prices up in this market, right? So the market continues to be tough. Recruitment consultants are, of course, impacted the most because they are the first ones to get hit in a tough market. IT companies continue to remain cautious about hiring. The non-IT market has been growing at -- most non-IT sectors have been growing at between 10% and 15% for us. So I mean, very -- so it's very hard to say what will happen going forward. Of course, if GDP growth starts to look up or if the world economy starts to do better or if things settle down between the U.S. and India, I don't know. If that -- if this whole uncertainty sort of -- if things start to stabilize a little more and they become more predictable, then it's easier for companies to make investment plans. So I hope that happens going forward.

Okay. The second question is on your diversification efforts in recruitment. Now you were providing some data on the Naukri India contribution to total recruitment billing. Any broad color that you can provide on how to think about it over the next 3 years? And related point is the recent recruitment organizational changes that you did, how do you think this will impact the diversification thrust that you've been leading?

Let me give you a sense of how we are thinking about the market going forward. There's the -- like you said, there's a core Naukri India B2B hiring business, which is the bulk of our revenue. Maybe -- I don't have the exact number on me right now, but maybe, let's say, it's 80% of our revenue, or 75% of our revenue. Now that is really the mass hiring market. And that is the one which is under pressure right now because this is the IT hiring market, this is the call center market. This is the market for hiring people between 2 to 8, 10, 12 years of experience. So this market is slow right now. What we are seeing as -- we're seeing a few trends emerging. And we believe that going forward, at least there's a lot of noise, there's a lot of talk about companies wanting to use AI as a copilot for hiring. A lot of companies want real-time intelligence and data to take better decisions on salaries and hiring and for talent planning. And we are also seeing a slight increase in demand for premium professionals, meaning people who are paid well. They are -- they seem to be -- and are more qualified and have the right skills, seem to be more in demand than earlier. In fact, the average salary of a person whose CV is viewed on Naukri has almost doubled over the last 5 or 6 years, right? So we think premium talent will be in more demand going forward. At the same time, we also see demand for blue collar and gray collar workers growing over time, right? And that's why the investments in IIM Jobs and Hirist, which are our premium tech and premium MBA hiring platforms and the investment in Job Hai, which is our blue collar and gray collar hiring platform. The international business is a small business for us. Naukri Gulf continues to grow at 20%. It's been growing at 20% for 2, 3 years now and is now very profitable. The Canada service business has also been growing at 15%, 17%, 18% for the last few years now and continues to be very profitable. So this is how we are thinking about -- how we think about the market and where it's going to go in the years to come. And this is why we have also restructured because we think increasingly the growth in core Naukri, the mass hiring, bulk hiring platform will be AI-led. And our Chief AI officer has also taken over as Chief Product Officer for Naukri for that reason. Similarly, like I said, at Job Hai, we started investing in a few years ago. We've now started monetizing it. We think the blue-collar market is a few years away, but it can become a large market over the next 5, 7, 8 years if we execute well. Demand at this end is for people is also growing, and they're all becoming net savvy. They're all on online platforms and so on. We also -- and so we have that -- so that business run like a separate unit, business unit. We also see demand for premium talent growing over time. So while we're doing whatever we can in Naukri to attract premium talent, but we are also investing in our IIMJobs and Hirist platforms, and these platforms have really grown over the last 2, 3 years. And we've moved our Naukri product head to run these platforms. So both IIMJobs and Hirist will now be run by Nimish going forward, along with Naukri Gulf. We see Naukri Gulf also continuing to grow. So that's the reason. So because we see -- we're saying, Naukri core more AI-led, run by -- product to be run by the AI person to make it easier. IIMJobs and Hirist focus more because premium hiring will look up going forward, and we put a senior person in charge. We've -- Job Hai, blue-collar platform will continue to grow, run like a separate business. We are investing in it. And of course, the consumer business, we also see an opportunity in the consumer business. That business has grown to become INR 150 crores, INR 170 crores for us over time, has been growing at 18%, 20%, makes up 50% margin. So perhaps that can grow faster if you focus on it. We haven't really focused on it much till now. And so we've put our -- put Shail in charge of that business as well in addition to running the Naukri 360 and marketing for us. So that's been the thinking behind the restructuring.

Okay. This is very helpful. My last question is your quick comments on the non-recruitment businesses and the road map to profitability there at an aggregate level. What are the time lines that you're thinking right now.

Let's go business by business, 99acres -- see , 99acres, we are very happy with the progress we've made in terms of growing supply on the platform, in terms of growing our traffic share. Our traffic share a year ago was maybe 36%, 37%. We now think it's around 48%, 49%. In the month of September, we touched 50% as well. So we've not seen this kind of traffic share gain in our real estate business in a long time. Now hopefully, revenue gains -- revenue growth will follow, maybe with a lag of 2, 3, 4 quarters, but it should happen. It should follow. And we've seen growth in all segments. We've seen growth in the new home business in terms of traffic. We are seeing growth in the new home segment. We are seeing growth in resale. We're seeing growth in rental. We are seeing growth in commercial. Inquiries on the platform are up substantially year-on-year, right? We are not able to monetize that growth right now, and that's why you still see some burn. But we've gained substantial traffic share and our -- the number of responses, the number of inquiries we generate, the supply on the platform, everything is like up substantially year-on-year. When will 99acres get to profitability, a lot will depend on, of course, how much we want to keep investing to gain share, number one. And number two, a lot will also depend on when revenue growth actually moves up. We've been in the mid-teens for a while now. We need to get to the 20%, 25% level, and we need to stay there for several years. And if we are able to do that, then we have high operating leverage in these platform businesses, as you know. Jeevansathi continues to execute really well. I don't think the market is growing at more than 10%, 11%. We are growing at 30%. We are breaking even. We are gaining share. And we are hoping that we can continue to sort of maintain this growth going forward as well. Let's see how this plays out. Again, we are not focused on profitability. We want to grow and gain share in Jeevansathi. Shiksha has been profitable -- has been a profitable operation, but Shiksha is a business I'm worried about a little because of the changes -- a lot of the traffic in Shiksha was -- is SEO traffic. And because of the changes you're seeing in search, platforms like Google, et cetera, have started answering questions directly, and there's an AI overview and so many other things that are changing in search. Traffic on Shiksha has actually -- or to Shiksha has fallen, right? So we are seeing -- we've seen a degrowth in terms of people ultimately ending up on Shiksha, right, from Google and other platforms. Now we are working on strategies to mitigate this decline in traffic, but it could take a few quarters before we figure things out. So growth, I hope -- on the other hand, pricing is looking up in this segment because most clients get their responses from Google -- inquiries from Google. And so -- but let's see how this plays out overall. So Shiksha is a little -- very hard to predict what's going to happen, but maybe we'll have a better answer for you 3 quarters from now in that business. Job Hai, we continue to invest. I think the Job Hai business is burning about maybe INR 40 crores a year, if I'm not mistaken, but we've started monetizing now. So last year, I think we did about INR 5 crores. This year, we'll do at least -- we'll try and grow that business, this business INR 15 crores, INR 17 crores. Let's see where we end up. And then let's see where we go from there.

Right. This is great. Last follow-up is on 99acres and the point you made on traffic. Is the traffic only genuine? Or is there also the AI-led -- genAI-led crawling traffic also? Is traffic a very reliable indicator of revenue market share going forward in this business?

Just traffic is not a very reliable indicator because you can get all kinds of traffic like you said. So you need to invest in getting quality traffic, right? You need to get -- invest in getting traffic, which converts into inquiries, into leads, ultimately into transactions for clients. Ultimately, your revenue is going to be a function of the number of successful transactions you enable through your platform. And which is why I also mentioned that our -- the inquiries we're generating for our customers through Shiksha or through 99acres are up substantially year-on-year. Now -- but it takes time to monetize. But as long as we are happy, as long as our traffic share is growing, relevant traffic share as long as our inquiries are growing as long as we are enabling more transactions through the platform, hopefully, we'll get rewarded for it at some point in time.

The next question from Vijit Jain from Citi. So we'll take the next question, actually. So next question is from Sachin from Bank of America.

I have 3 questions. First question, I know, Hitesh, it's early days, but this entire H1B issue. On the back of it, we are seeing media articles that certain GCCs are looking to expand their presence in India. Basis your interactions with most GCCs, do you see this as an opportunity where they could look to hire a bit more in India and in that process, platforms like yours benefit on the back of it?

I hope that happens. The GCC business has been growing at 17%, 18% for us for the last couple of quarters. There are -- a lot of GCCs in India are -- the bigger ones employ. A lot of companies have 30% of their global workforce operating out of India, right? So there are lots of GCCs who already operate at that level where they have 30% of all their global workforce operating out of India, maybe 60% tech, maybe 25% in other functions, but that's how big they are, right? And there are some 1,700-odd GCCs. I'm sure not all of them are operating at 30% of their workforce in India, right, at that level. So there's substantial, I think, room for growth there, both with existing GCCs and hopefully, new GCCs will also setup shop over time. So that continues to be a big opportunity for India. I think these GCCs today employ around 1.7 million people or so. And the jobs also tend to be slightly higher quality. And they have also, over time, moved up the value chain. So you are seeing a lot of high-end jobs also move to India now, which was perhaps not the case earlier. Earlier, most of them used to -- most GCCs or back offices used to be about just hiring IT workers and call center employees. That's not the case anymore. So now will this H1B issue lead to more hiring in GCCs? I don't know because things keep changing every few weeks, right? So a lot of clarifications have been issued by the U.S. government. So I don't know. I don't know whether this will have an impact on more jobs getting created in India. But India is really -- if you ask anybody outside, they'll tell you, India is the only country outside the U.S. and China, where you can get high-quality talent at scale, right? And that's really our advantage. And any company which wants to hire high quality -- cost arbitrage is just one part of the story. But if you want to hire a lot of high-quality people, especially in high-end roles, the only place other than the U.S. and China where you can get them in large numbers and cheap is India.

Got it. Very clear. Second question is, how does management look at marketing spends? And this question is because in the past, you guys had mentioned that if the billings growth continues to be a bit soft and given the fact that you guys are competitively better positioned as compared to peers, why not take this as an opportunity to spend a bit more in terms of pushing for market share growth? Should that how we be looking at the company directionally that if growth on billings is a bit soft, you guys could spend a bit more on marketing or how to think about it?

Spend money on marketing because billings growth is soft. We are spending on marketing because it makes -- in some verticals, we are spending a lot more than we were spending earlier, like I mentioned 99acres, I mentioned Jeevansathi, Job Hai because we see an opportunity to gain market share, right?

So more on those lines, opportunity to gain market share...

Of course, the marketing has to work for us, right? It has to -- we have some models which we use internally to understand whether the marketing is working for us or not. And as long as the marketing investments continue to work for us and we continue to gain share and it just makes sense to keep investing in marketing, and we will continue to do that. Now in -- so we are perhaps spending more on marketing than our competitors now in 99acres and -- not in Jeevansathi because -- but in Jeevansathi, we're only in the northern part of the country. So in that geography, we are spending enough. And even in Job Hai, now we have upped our marketing spend. In Naukri, we are spending a little more, for example, in Naukri Gulf, we are spending a little more on Hirist because these are growing businesses. Core Naukri, we are not spending as much. We don't think we need to spend a lot because we're getting the CVs we need anyway. It's a tight market, right? It's not easy to get jobs. So on the other hand, if the market starts to change or if competition becomes -- starts investing a lot more, then perhaps we'll be forced to respond. But till then, I think we are fine.

Got it. And last question, I just wanted to understand directionally how should we look at realizations in context of you guys looking to penetrate a bit deeper into Tier 2, Tier 3 because it's very evident that as and how you go into Tier 2, Tier 3, the average -- there's a bit of a pressure on average realization. Is that something we need to be mindful about as you expand more into Tier 2, Tier 3?

Yes. See, every time -- see, new business development requires investment and most companies who start fresh with us start small. And we -- see, we've already -- we are already in many of these cities. So we've already opened offices in 70, 80, 90 cities. We've already hired people. It's not as if we are going to be hiring more people and investing a lot more than we were investing earlier in Tier 2 cities or Tier 3 cities now because we made those investments in marketing to get CVs. We've opened these offices already. We've already hired the salespeople on the ground. But yes, the ARPU -- the customer ARPU in Tier 2 and Tier 3 will be much lower than the ARPUs you get in Bangalore and Bombay and Delhi.

Next question is from Vijit from Citibank.

Can you hear me now? Yes. Apologies for earlier. My first question, Hitesh so you talked a little bit about this AI-led approaches in Naukri. I wanted to double-click on that. So first, is that referring to how the Resdex database will be used in the future? It will be more -- it will be more qualitative queries and search prompts that people will enter and that's what you're looking at? Or is there more in terms of how you're rethinking the product on the Naukri side? That's my first question. When you talk about AI-led...

Yes. So there are many types of AI. And we've been investing in machine learning for several years now. And most of the gains we've seen until now have been on account of the investments we made in machine learning, which we started investing in maybe 7, 8 years ago, right? So whether it's search quality, whether it's quality of recommendations, whether it's personalization, all this is data science plus machine learning feedback loop led, right? And these gains have mostly materialized already in Jeevansathi and in Naukri. Now of course, we are also trying to reimagine experiences and using generative AI and other tools, which are -- which have now become available to us, right, over the last few years. And just -- because we're investing more, we're just thinking about how more we can sort of use AI to improve and enhance the experience. So one of the things, for example, we are working on is, you mentioned Resdex. So earlier, how it worked is that companies would -- recruiters would log into Resdex and they would search basis some query or some JD they had in mind and then they would contact, they would shortlist candidates and then they would call them on the phone one by one. And then if calls are not answered, they will call again and so on and so forth. So one of the things we are trying to -- we are experimenting with is like a recruitment copilot in that sense, where you actually get AI to do all this for you, right? So the AI understands what you're looking for. So it shows you a few profiles and you would then tell it whether -- tell the AI those profiles are the type of profiles you're looking for. And then the AI takes over, it searches the database, it contacts job seekers, it phones them, it asks them a few questions if you want a few questions to be asked and then finally gives you a list of candidates, which you can maybe interview. So these are all -- these are pilots. There are -- some are in commercial beta with some customers. Of course, you get feedback from customers, you iterate, you go back to them. So early days. But we are already -- these are already in commercial beta with some customers. And of course, then the revenue model also as we figured out. So many things to be done still, right? So -- and then, of course, you have some generative AI-enabled features like if you're posting a job on the platform, generative AI can help you post a better JD. It can help you do it faster. There are reviews in 1 Ambition Box or on Shiksha. You can use generative AI to summarize those reviews for the user. So a lot of experience enhancements using generative AI are possible. People want to write -- we are helping people prepare for interviews using generative AI, right, mock interviews through generative. All these things have become possible, which were not possible earlier. So we are experimenting with a bunch of such things. And then, of course, there's this whole -- there are lots of AI tools now available to us. So let's take marketing, for example. We run ads, for example, on Instagram, on Facebook and on Google. Previously, we would experiment with a few creatives and take them live. And then it used to take a lot of effort and time and effort to make new creatives. Now you can use GenAI tools to create new creatives on the fly. You can create thousands of them very quickly and experiment with them. So we're also trying to use these AI tools. I mean some coders are experimenting with AI tools to see if they can code faster and become more efficient at coding. So then that's the whole -- that's a separate suite, using external AI tools to become more efficient and smarter at what we do across all functions, not just in product or engineering.

Got it. So Hitesh, it's safe to say that in those product changes and those product pilots that you're running, the monetization or how you would -- how customers would pay for it has to be different from what is the norm now, right? You would have to charge differently, charge possibly higher...

Yes. And as we figured out, right, it has to be -- so we have gone to something, but like we're experimenting something right now as we speak, but it could change going forward based on the feedback we get.

Understood. My second question was on the property segment now, I mean, obviously, you're seeing -- we can see that you're seeing a lot of market share gains here. Do you think this is moving into that direction where some kind of a consolidation move is likely? We've seen some of that in the industry -- in other spaces in the industry recently. And from your point of view, if you assess some kind of an opportunity, obviously, a consolidation move has an impact on the category as well, right, in terms of pricing, in terms of many other things. Would that be a part of how you would assess an opportunity should that arise -- of consolidation?

We are open, I mean, to consolidation in both Matrimony and real estate, and we've said that for a while. And so if the right opportunity arises at the right price for the right kind of company, we'll be more than happy to acquire.

I guess, Hitesh, my question was also because it can help improve the profitability of the entire segment, would that have a role to play in your fair value assessment?

No, yes, of course. I mean you're right. if acquisition leads to higher market share, higher traffic share and ultimately better pricing, that will -- I mean, we'll keep that in mind while evaluating whichever company we look to acquire.

Got it. And my last question, I think you covered some bit of -- in the previous question from Sachin. But just this the GCCs bit, we've had a few announcements from U.S. recently, and I've seen a few news articles suggesting that after the H1B announcements, there's been another push, at least in some pockets on shifting some work to India. Have you seen that in your client base? Is GCC seeing another leg up just simply because of all of these developments?

See, hard to say, there are already 1,700 GCCs. So maybe a few get added every -- a few new ones open every month. Has that number changed over the last 3 months? I don't know, actually. We don't track that. So there's a lot of -- and see what -- our GCC business has been growing at 17%, 18% over the last 2, 3 quarters, right? Now the bigger ones think differently from the smaller ones. If a GCC already has 20,000 people on the ground, there -- it's unlikely that they will add a lot of new people in a hurry, right? If 30% of their work is already in India. What happens to their global business impacts the India business -- India operation also, right? On the other hand, most GCCs when they start in India, they start small. They don't start with 20,000 people or 10,000 people. They start with a few hundred people or tens of people and they scale up over time, right? So I think that will continue because GCCs, which have set up shop in India over the last 2, 3 years, where their India headcount is still maybe 2%, 3%, 4%, 5%, 7% of their global headcount, I think there's going to be room for them to grow, continue to grow for several years. And I think that will continue. Will we start seeing new GCCs in India or many more companies setting up shop because of this H1B issue, I don't know. Hard for me to say.

Next question is from Deep Shah from BK Securities.

So first question is on Shiksha. So you did mention that because the search is shifting to, say, AI or even Gemini, the number of hits on the websites are coming down. Now Hitesh, what is your take on this? I mean, we had ideally believe that verticals would largely remain immune to this because of the granularity of information that is available on these websites. So maybe search will start on ChatGPT or any such AI platform, but eventually move to a vertical for the detailed information available. So is there some error in that understanding? Are you seeing maybe people who are coming on the website spending more time than before, something like that? Because otherwise, this has the potential to disrupt any vertical, right? So your comments on that, maybe even all the comments would be useful. Second...

I think there is a bigger problem where the content is static and not very dynamic. For example, on 99acres and Naukri content is very dynamic, the listings change every day, the jobs change every day, et cetera. And all the details are available and people want to quote the details, people want to -- they can only apply on our platform and so on. But Shiksha is a little different because it's a content-led platform. A lot of the content is static, does not change every day. And a lot of publishers globally have seen traffic fall -- the traffic they were getting from Google fall. Now the people who want to go -- who are very serious users who want to go into more detail, et cetera, they, of course, still put in the effort. But I mean, you may have seen your own behavior, like if you want to answer to a question very quickly, previously, maybe he would have visited -- let's take health platforms. He would have gone to a Mayo Clinic website or some other website. But today, if you get an answer from the AI engine or from the AI overview, you don't necessarily sort of always end up visiting these platforms. I think that's what Shiksha has seen. Of course, we are working on strategies to mitigate this. But it is something which has happened in the last few quarters. And it's impacting, of course, every platform in education, all the other sort of players in this space as well. And I'm sure this has impacted all other publishers too of content. So it's a real change in behavior.

Yes, you're right. In the sense, even our behavior has changed. So that's fair. And Hitesh, so say, for example, if the nature of search changes, the way we interact with horizontal, right, search platforms, how difficult it is to have an internal system within Shiksha that instead of me searching for colleges the traditional way, I can simply enter my query and then the results pop up the way it pops up for, say, a ChatGPT channel platform. How easy or difficult is that to create? Again, this would be applicable for all verticals.

See, the problem is the top of the funnel. You see once a person lands on Shiksha, there's no problem. We can engage it even more than we were engaging him earlier, right? But if fewer people end up on your platform because see a lot of our traffic comes from the people who are searching on Google. And previously, what used to happen is that when you would search on Google, Google would show you a few links and basis your query, you would end up on Shiksha or on some other platform. Google would not answer the question for you, right? Now that has changed. So for the number of people who end up on a content platform like Shiksha, right, have fallen. There are still many who are coming, right? And there are many who come directly as well. But the total number of -- so at the top of the funnel, you're getting fewer people. Of course, the ones you are getting are perhaps more serious and you can engage them a lot more than earlier. But there is a problem at the top of the funnel, which has to be fixed.

Understood. No, this is very helpful to understand this vertical horizontal fight. Second is more straightforward. So we have not seen any change in the composition of revenue of 99acres, builders, brokers, et cetera. And we are seeing a number of paid listings grow very rapidly in the last 2 quarters. So I hear your comments on delayed monetization, but is there some change in pricing as such because number of paid listings have grown rapidly in the last 2 quarters. Billings have not. So if you could just help us understand. And it's not that as if owner profiles are more versus brokers and therefore, maybe ARPU or listing or whatever that metric is, would come down. So if you just help us understand this.

Yes. See, we've made a lot of changes to our sort of marketing mix. We've changed pricing in a few markets. We have increased our focus on customer acquisition. We have changed our marketing mix. So with the overall objective of growing our traffic share and growing our market share and delivering more value to our customers. So now listings have grown because, one, maybe they are cheaper in some markets than they were earlier. Two, because we've acquired a lot of new customers on the ground, and they are posting listings. Three, there's generally more competition amongst brokers to get more responses, right? So sometimes that also impacts -- it's a good market. So I think it's a combination of various things which have led to what you see.

And next question from Nikhil from Nuvama.

Hitesh, very strong growth in GCC, but partially, it looks like the base was also relatively softer. So sequentially, GCC actually grew lower than the company growth. So was there any seasonality because you only recently started disclosing this particular segment? Or actually you saw some slowdown on a sequential basis?

See not much has changed on the ground. I would not read too much into these quarterly numbers. Growth can change basis a couple of customers renewing or not renewing or upgrading or not upgrading. I think perhaps we should look at all these segment-wise numbers on an annual basis more than on a quarterly basis. That may be a better indicator of what's happening than just quarterly numbers.

Got it, Hitesh. Second, on AI, multiple of questions here. So first on how prepared we are for the new set of product? We have recently -- and you must have recently heard the Koreai raising big bank funding. They are launching more products. So do you think our product pipeline capability and investment is completely on track? Or do you think we need to accelerate, especially competing with AI-first companies? Second, you did highlight it earlier that AI investment monetization will happen much more quicker and some of the products we have launched recently. So where we are in this monetization journey? And last one, globally, we are seeing this phenomenon, Hitesh, which you also called out, that senior hiring are increasing in the AI-first world, while juniors is actually going down. So do you plan to at least pilot new product, new capability where you can monetize this opportunity? Because, I mean, it's not one-to-one, right? I mean when the salary doubles, ultimately, you are contributing more to your clients. So any plan? So 3 questions within AI.