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Ladies and gentlemen, good day, and welcome to the Info Edge Limited Q4 FY 2018/'19 Results Conference Call. Joining us on the call today are Mr. Hitesh Oberoi, Managing Director and CEO; Mr. Chintan Thakkar, CFO; and Mr. Sanjeev Bikhchandani, Vice Chairman. [Operator Instructions]I now hand the conference over to Mr. Hitesh Oberoi. Thank you. And over to you, sir.
Thank you. Good evening, everyone, and welcome to our fourth quarter and annual results conference call for FY '19. We will first take you through the quarterly and annual performance -- financial performance of the company. Then, we will cover each business in more detail. And in the end, we'll be happy to take questions. For your information, the audited financial statements file has been uploaded on our website, infoedge.in. We have also provided other financial details like segmental billing, revenue, profit before taxes and DSR movement in the data sheet on our website. Firstly, talking about the stand-alone financials. Billings in Q4 were INR 360.8 crores, up 19% year-on-year. FY '19 billings stood at INR 1,176.9 crores, up 21% year-over-year. Revenue in Q4 was INR 292.6 crores, up 22% year-on-year. FY '19 revenues stood at INR 1,098.2 crores, up 20% year-on-year. Operating expenses, excluding depreciation, for the quarter were INR 201.3 crores, up 11% year-on-year. For FY '19, expenses stood at INR 756.9 crores, up 22% year-on-year. A major proportion out of the INR 140 crores incremental expenses were on marketing and tech enhancements of the platform. Operating EBITDA for Q4 stood at INR 91.2 crores versus INR 59.3 crores last year, an increase of 54% year-on-year. FY '19 operating EBITDA stood at INR 341.3 crores, up from INR 297.3 crores last year. Operating EBITDA margin for the quarter stood at 31% versus 24.7% last year. For FY '19, EBITDA margin stood at 31% versus 32.5% last year. EBITDA adjusted for ESOP noncash charges for Q4 stood at INR 96.6 crores versus INR 59.6 crores last year, and FY '19 adjusted EBITDA stood at INR 356.5 crores versus INR 315 crores last year. Adjusted EBITDA margins stood at 33% versus 24.8% last year and for FY '19, adjusted EBITDA margin stood at 32% versus 34.2% last year. Deferred sales revenue has increased to INR 474.4 crores as of March 31, 2019 versus INR 395.6 crores as of March 31, 2018, an increase of 19.9% year-on-year. The cash balance stands at INR 1,617 crores as of 31 March 2019, versus INR 1,562 crores as of 31 March 2018, and INR 1,522 crores as of 31 December 2018. Cash flow from operations stood at INR 131 crores during the quarter versus INR 130 crores in Q4 of 2018 and INR 296 crores for the year 2019 versus INR 307 crores in FY '18. During the year, we focused our bank loan investments across all our brands. Some of you may have already witnessed our enhanced brand presence on the television shows and during major events on television as well as online. The same is reflected in our overall increase in the marketing and promotion spend, which went up from INR 116 crores in FY '18 to INR 176 crores in FY '19, an increase of 51% year-on-year. It is likely that we will continue to plow back part of the revenue growth to consolidate our brands' sort of positioning and gain traffic share in coming quarters. Similarly, we began incremental investments in areas like technology, product design, AI and data science. We have started building a healthy pipeline of innovation, new products and features keeping in mind the long-term emergence of opportunities in the recruitment and other verticals. And we would, in fact, like to accelerate this pace going forward. Such investments are mostly in the form of people cost and IT infrastructure and is likely to pass through P&L as incremental operating expenses. The Board has recommended a final dividend of 30% for FY '18/'19. This would take the dividend for the year to INR 6 per share, including the 2 interim dividends of INR 2.5 per share and INR 1.5 per share already announced earlier. Moving on to consolidated financials. At the consolidated level, the net sales for the company stood at INR 1,150.9 crores versus INR 988.2 crores for the last financial year. With the consolidated ANP at the PAT level, there is a profit of INR 589.1 crores versus a profit of INR 502 crores for the last financial year. Adjusted for exceptional items, PAT stood at a loss of INR 24.4 crores in FY '18/'19 versus a profit of INR 188 crores in last year. The aggregate top line of the investing companies in FY '18/'19 grew to INR 2,030 crores versus INR 937 crores in last year, an increase of 116.5%. Moving on to performance by segment. We will first discuss the recruitment segment. In Q4, recruitment billings grew -- were INR 259.7 crores while revenues were INR 207.3 crores, a growth of 20% year-on-year. Operating EBITDA margins in recruitment segment were at 52.9% versus 53.2% in Q4 FY '18. EBITDA margin adjusted for noncash -- ESOP noncash charges stood at 54%. In the full year FY '19, recruitment billings grew 20% to INR 847.5 crores while revenue grew 17.5% to INR 785.8 crores. EBITDA margin stood at 54.6% compared to 56.2% in FY '18. Adjusted margin stood at 55.5%. In Naukri, in Q4 FY '19, we added an average of 14,000 fresh CVs every day and the Naukri database grew to over 63 million CVs. Average CV modifications were at close to 340,000 CVs per day. Our traffic share in the job portal space continues to be in the mid-70s excluding Indeed and in the mid-60s including Indeed. And we continue to invest in our recruitment tools and systems business as we add more clients to the product. We will also focus on innovating and adding new functionalities in the platform through application of artificial intelligence and machine learning. IT hiring, which directly or indirectly contributes to about 42% of Naukri revenue, continued to impact the growth rate of Naukri. The new customer acquisition and -- as well as retention rate of existing customers remained high throughout the year, driving the growth of -- driving growth in business revenues. We also noticed billing growth through sales of more upgrades and additional users from existing clients. Construction sector was impacted by a slowdown in IT hiring in, however this -- in last year. However, this got covered up in the latter part of the year. Naukri Gulf business grew at 18% year-on-year in FY '19 and the total revenue from this business stood at INR 48.4 crores. We've been deploying new marketing in this sector to increase active profile in the database and acquire more profiles from key investment cities. And this sort of resulted in our marketing spend going up through the year. We also invested aggressively behind brand with a mix of TV and media advertising in key cities. This led to a gain in traffic share in the last few months and higher app engagement as well. We now consistently average more than 1 million DAUs on our app every day. We also announced the acquisition of iimjobs on the stock exchanges today. We will be acquiring 100% share of iimjobs for an all-cash deal of INR 80.8 crores. iimjobs, as some of you may know, is India's leading online job platform for job seekers from premier institutions. iimjobs was founded in 2010 by Tarun Matta, an IIT-IIM alum, with the aim of addressing the job needs of job seekers graduating from premier institutes. Over the years, iimjobs has built a strong niche brand among such job seekers and recruiters looking to hire them. With 23,000 job postings and 1.8 million job applications every month, iimjobs has become one of the leading recruitment platforms in this community. iimjobs reported a revenue of INR 16.6 crores for FY 2019. These numbers are not audited though. The business has been growing at 25% or so for the last 2 years. Moving on to the other verticals. The 99acres business billings in Q4 grew 19% year-on-year to INR 66.7 crores, while revenue grew 46% to INR 54.4 crores. For FY '19, billing and revenue grew 32% and 41.7% to INR 206.6 crores and INR 192 crores, respectively. Q4 EBITDA loss stood at about INR 2.9 crores against the loss of INR 13.5 crores last year. EBITDA loss in FY '19 stood at INR 32 crores, down from INR 30 crores last year. The Q4 adjusted EBITDA, adjusted for ESOP expenses, stood at a loss of INR 2.16 crores versus the loss of INR 13.5 crores last year. For FY '19 adjusted EBITDA stood at a loss of INR 19.5 crores versus a loss of INR 25.7 crores last year. Our traffic share amongst the real estate portals stood at a high of -- stood at around 52% during the quarter based on time spent as per SimilarWeb. And we continue to maintain our traffic leadership in all major markets. Billings from the brokers and agents continue to inch up and cross-builder billings in FY '19. Broker billings are around 52% of our total billings while builder billings are about 42% of our total billings. The proportion of billing from resale properties has been on increasing trend making the platform more comprehensive and vibrant. We will continue to invest aggressively in the 99acres business moving into FY '20 as the evidence of revival of the real estate segment and as competitors get more aggressive in the market. Moving on to the matrimonial business. Billings in Jeevansathi for Q4 stood at INR 19.8 crores, a year-on-year growth of 11% on a base of INR 17.9 crores Q4 '17/'18. FY '19 revenues and billings grew 5% year-on-year to INR 73.5 crores and INR 72.3 crores, respectively. Effective marketing spend during the quarter along with improved realizations helped higher sales growth in Q4. We are plus looking to -- we are looking to consolidate our position as we penetrate deeper into our core markets in the matrimony business, especially in the north and west. We plan to spend considerably more on marketing across all our core markets as we move into FY '20 to strengthen our brand presence and increase our profile acquisition rate.Operating EBITDA losses in matrimony reduced to INR 5.8 crores in Q4 of FY '19, down from a loss of INR 11.5 crores in Q4 of FY '18. Losses in FY '19, full year FY '19 stood at INR 33.8 crores compared to a loss of INR 23.4 crores in FY '18. Adjusted EBITDA loss stood at INR 5.6 crores in Q4 of FY '19 versus a loss of INR 11.4 crores in Q4 of FY '18. For FY '19, as a whole, adjusted losses stood at INR 33.2 crores versus INR 22.7 crores in FY '18. Moving on to the Shiksha business. In Shiksha, in Q4, billings grew by 5% year-on-year to INR 14.6 crores while revenue grew 14% year-on-year and reached INR 12.8 crores. In FY '19, billing and revenue grew 18% and 13% and stood at INR 49.2 crores and INR 48.9 crores, respectively. In Q4, we made an EBITDA profit of INR 63 lakhs, up 59% year-on-year. The FY '19 profits stood at INR 90 lakhs versus a profit of INR 2.2 crores in FY '18. Adjusted EBITDA profit for the quarter stood at INR 90 lakhs, up from INR 70 lakhs last year. And adjusted EBITDA profit for FY '19 stood at INR 1.9 crores, down from INR 3.7 crores last year. We continue to sort of invest more in improving the site content and in building deep domain expertise. This will hopefully help us improve our response to our advertisers and build more going forward. Moving on to our strategic investments. Our investing companies continue to witness solid growth. Zomato concluded its business deal for approximately USD 170 million. The follow-up round of funding of USD 210 million from Alipay announced in November '18 was also received in the last quarter. Zomato also received about $100 million of funding from Delivery Hero and few other investors during the quarter. We also did follow-on rounds of investment in our investing companies, Policybazaar INR 413 crores, Meritnation, ShopKirana, Gramophone, Wishbook and ShoeKonnect. We also provisioned a few of our investments, including Rare Media, Vacation Labs, et cetera, during the year. And we continue to reevaluate new investment opportunities from time to time. Thank you. That's all from us. And we're now ready to take any questions.
[Operator Instructions] The first question is from the line of Ankur Rudra from CLSA.
Just a question on the 99acres business. The billing growth here appears to have slowed down on a year-over-year basis from around 40% to 20%. Have you seen any impact on the business because of broader transitions in the real estate market? Or do you think this is the change in the momentum of the business?
Well H1 sort of -- billing rates were -- we saw good growth in H1 partly because H1 of last year was impacted due to RERA sort of -- RERA in key markets. So the base for H1 was low. Growth has slowed down in H2, partly because base at H2 last year was higher, and partly -- what we have anecdotally in the market is that there aren't enough new launches happening because the smaller builders are not able to raise funds very easily. But this is anecdotal. I mean -- I think we'll have to wait and watch and see what happens in the next 1 or 2 quarters before we can form an opinion on what's happening in this space.
But this would be below trend growth from your perspective in terms of where the market penetration is?
Yes. But we also had a great Q4 last year. So this is on top of a great Q4 last year. Like I said, yes, I mean, we would expect to grow faster given market conditions, but we'll have to wait for a quarter to see what this is -- whether this is sort of a one-off or whether we can improve going forward.
Okay. Just a question on iimjobs. Is this mainly to expand your focus areas beyond the experience level that the core brand focuses on and try and expand toward other segments?
Yes. So iimjobs is manageable. It's a great brand in the sort of premium job seeker management space. A lot of people from -- who graduate from premiere institutions go to iimjobs to look for job. And then they've sort of executed well over the last few years. And -- so I think this will complement the offerings we have for our customers and will help us get a greater larger share of wallet from them in the long run.
The next question is from the line of Mayank Babla from Dalal & Broacha.
Just wanted to know the latest number of builders and brokers that we have on board.
So in 99acres, there were close to about 19,000 brokers and about 5,000 builders last year. I don't have the exact number but that's the range -- broader range.
Around 5,000 builders, right?
Yes.
[Operator Instructions] The next question is from the line of [ Abhishek Joshi ] from [ CGS-CIMB ].
Sir, if I can see your share from -- your share of losses from joint ventures has increased significantly from INR 44 crores last year to INR 309 crores. So what were the businesses which had majorly contributed to the losses this year?
These business are ETech and Zomato for which we are following the equity method as per IndAS. So our share of loss for those 2 businesses has increased.
[Operator Instructions] The next question is from the line of Manish Adukia from Goldman Sachs.
Can you just provide an update on competition in all 3 verticals, Shiksha, real estate and Jeevansathi, please?
Well the competitors remain the same. Meaning, in the recruitment business, we compete with the likes of TimesJobs, Shine, Monster, Indeed, LinkedIn and all startups. In the real estate, the main competition is from Magicbricks. There are smaller players in the market as well, like Housing and CommonFloor. And at the lower end, we also have the Quikrs and OLXs of the world. And there -- and then, of course, there are all kinds of other startups. And in the matrimony space, the main competition is from Shaadi in the north and western part of the country and Bharat Matrimony in other parts of the country. So the competitive situation is more or less what was last quarter. Yes, there are ups and downs. There are sometimes you have competition spending a little more than usual and then you respond. But broadly, the competitive landscape continues to be the same.
Right. And Hitesh in last quarter, for example, you had said that -- in the recruitment space you had said that competition was spending a fair bit on branding, et cetera, and that probably also led you to spend more in that space now. From a competitive behavior, especially coming from what Indeed is doing, are you seeing any impact of that on your traffic share? Or is there no impact there at all?
See, obviously, when somebody's very aggressive, it does impact -- and especially if your share of voice is low, it does impact your traffic to some -- especially in the period in which they are very active. But in the last 3 or 4 months, we were a little more active as well, and we actually saw traffic share in jobs climb up. We, in fact, gained about [ 90 ] percentage points in the last 4 months. But prior to that, our competition was very aggressive. So we lost a few percentage points there. So -- but what we've seen is that you sort of oscillate within a certain range. But what you can't do is sort of not respond to competition at all. So you may choose -- so if competition gets -- competitive activity, especially on the marketing front gets intense then you have to respond.
Right. I guess last follow-up from me on this point, on 99acres, you mentioned Magicbricks as competition, but what about -- that's the #3 player and they also seem to be have been reasonably aggressive in terms of their spread, et cetera. So what are you seeing from them in terms of the competition?
Yes. You're right. We saw a lot more marketing activity from Housing in the second half of last year and in the last few months as well. But it's still a much smaller player in the overall scheme of things. Now if they decide to become even more aggressive going forward, we'll see how to respond to that. One more thing sort of in the real estate space, we also compete with the Facebooks and Googles of the world because they also get a large share of the spend from some of big developers. So they're also in some way a competition. But we don't directly compete with them because they're not portals.
The next question is from the line of Mukul Garg from Haitong Securities.
Just wanted to clarify, you mentioned that on the Naukri business, the EBITDA margin this quarter was 52.9%. Is this the correct number?
Just one second. Yes, operating EBITDA margin in the recruitment segment was 52.9%, yes.
Right. So if I look at...
This is for entire recruitment segment, including Naukri plus Naukri Gulf plus Quadrangle plus everything else. Yes.
Right. So if I look at last 6 or 7 quarters, you guys have seen a margin correction from a peak of 59% to now almost 53%. And this is kind of a continuous trend. You've also highlighted that there is pressure on the kind of marketing spend from your peers. So how should we see this stabilizing going forward? Is this something which should settle at this particular profile -- margin profile? Or is there a risk that continuing competition from Indeed might see further erosion in the margin profile?
Well, this is not just competition. See, we are also investing a lot, like I sort of said in our -- improving our platform, improving our user experience, building new products. We're creating new capability in machine learning, data science. We've been investing in the RMS sort of business for a while now. Now all of this is OpEx. And of course, brand activity also moved up in the last 6 months. And -- but we believe that we need to make these investments because this is -- these are important for the business to sort of remain strong in the long run. And -- so if -- and yes, we need to grow our business at least 20%, 22% to sort of maintain margins going forward. And if that does not happen then margins could suffer in the short term. But hopefully, we'll be a much stronger and bigger platform in the long run if these investments are successful.
Right. But you have any internal target that any particular margin profile is kind of a target, which you should not breach this 50% something which you don't see margins going below that number? And any thoughts on exactly how we should look at margin profile in the near to medium term?
No, we don't have any such targets. And we are optimizing more for the long run than for next 1 or 2 quarters.
Right. No, it was more in terms of how should we look for FY '20 and '21. Is it a 1 or 2 quarter kind of an event on the margin correction? Or do you think that the new investment will start paying off, maybe from second half onwards? Or will it take a little bit longer?
So the new investments we are making the -- will continue. And they'll only increase going forward. I don't know when they will sort of start paying off. So that is hard for me to say. A lot will also depend on the state of the market. If hiring slows down, we'll be -- we could get impacted. If, on the other hand, hiring picks up, irrespective of whether we made the investments or not, things could look up. So it's very hard for me to predict what's going to happen on the revenue front and when these investments start paying off. But yes, the investments will only increase going forward.
The next question is from the line of Arya Sen from Jefferies.
Could you give a bit of an update on Policybazaar, particularly revenue for this year, EBITDA, et cetera?
So we don't disclose this separately. It's not a subsidiary of us. So we really are not in a position to disclose EBITDA, but it is growing fast and it is a dominant market leader in its segment, insurance aggregation.
And is it profitable?
No. It is not profitable.
So sorry, when you mentioned that the JV losses was -- one was Zomato and which was the second business, Policybazaar, is it?
Yes, ETech Aces, it's in Policybazaar.
Okay. Okay. Secondly if you could talk about iimjobs' revenue model.
Revenue model is similar to Naukri, job listings and database access services mostly and some revenue from Jobseeker as well. Very similar model to Naukri.
Okay. Understood. Also in terms of if I look at 99acres margins, it's actually been -- it's -- the losses have narrowed over the last 2, 3 quarters. So is that a sustainable level? Or would you expect losses to increase again over the next 2 years? How do we look at it?
It's -- see, we want to up our investment in this space, but it's very hard for me to predict what's going to happen. One, because on the revenue front, real estate is very topsy-turvy sort of industry. Every now and then, you have some -- you think you're out of the woods, and there is some other issue. So in the last 3 or 4 years, we had RERA, demonetization, GST and now we have these NBFC crisis. So on the revenue front, it's very hard to predict what's going to happen. And on the cost side, we want [ there are some ] investment we have to make to sort of improve our products, improve our platforms. Those, we'll continue to make. And on the brands side, a lot will depend on competitive intensity like we were discussing earlier on the call. If Housing decides to up its investment in the space once again, we'll be forced to respond and so on. So it's hard for me to say what the margin sort of profile could look like. It is well possible that we will sort of lose more money before we start making money in 99acres.
Right. And then the narrowing of losses over the last 3 quarters is mainly a function of the fact that growth has picked up and competitive intensity has not sort of kept pace.
Competitive intensity was moderate and yet growth was good last year, which is why sort of losses narrowed a little bit.
Right. And Jeevansathi again, the losses seem to have narrowed this quarter relative to the last 2 quarters. So were the last 2 quarters an aberration? Or was -- how do we look at it going forward?
No. See in Jeevansathi also the market is -- competitive intensity is very, very high. And so customer acquisition costs are going up and realizations are going down. The trend even in the matrimony space is more sort of competitive activity, and therefore, our losses -- while our growth rate may go up, but our losses are also likely to increase going forward in the medium term. Now there could be a quarter where we advertise less, somebody advertises more and losses may go down that quarter and maybe pick up in another quarter. But overall, we'll -- it's likely that we will invest more in business going forward.
Sure. And just to reconfirm the numbers, last quarter, Jeevansathi was about INR 15 crores of loss. And this quarter, it's about...
No. No. Last quarter, Jeevansathi -- last quarter meaning Q3 or Q4?
Q3.
Q3 FY '19.
That's correct. It was around that.
Yes. Q3, it was about INR 15 crores. And this quarter, around INR 6 crores.
The next question is from the line of Mayank Babla from Dalal & Broacha.
Sir, I was just wondering your views, a lot of our interactions and -- on conference call lately suggest a slowdown in IT in a number of services. Sir, I believe even this year -- quarter, hiring is -- net additions have come down drastically compared to last year. So what is your view on that?
Well, IT was actually a growth driver for us last year. So we work really well in all the IT markets. And our IT segment sort of grew faster than our non-IT segment. If things are going to change going forward, I really don't -- I can't comment on that right now. But so far, so good is all I can say.
Okay. And my second question will be -- while I understand you can't give out numbers on Policybazaar, but I would like to know your views on the trends and latest updates on the online insurance space?
So I think the market is large. You are seeing B2B insurance companies come in. I think there is also movement happening on the non-insurance side of our business, which is Paisabazaar. So all of that is looking good. Of course, Policybazaar has to determine how to deal with this online insurance companies and how -- whether it's competition or whether it's collaboration or what is it. So lots of moving parts, but the business is growing well.
Growing well. Okay. And sir, my last question would be iimjobs, you had said that INR 16.6 crores was the revenue last year, right?
Yes. Yes. That's correct.
The next question is from the line of Darpan Thakkar from HSBC.
Can you give some color on the employee additions, like roughly, [ 300 ] were added last year. Which segment these employees have been added? And similarly, on marketing spend, additional INR 60 crore of marketing spend, on which segment is the spend higher or -- some color on this?
So employees are added in sort of almost all the business units and in almost all the departments. So if we hire a tech product, data science, sales, customer service, sales and support functions. So we are truly sort of -- I think we have added a few people. And in every business, we added a few people, by and large. And the -- as far as the marketing spend is concerned, marketing spend sort of went up in -- our gains went up in all the businesses. So we spent a lot more in marketing in Naukri as well this year over last year. Even Jeevansathi and in 99acres, spends were higher than last year.
Okay. And somebody mentioned that Google and Facebook also contribute a higher revenue for real estate sector. So any area that how much of revenue these portals earn? And how much comes from Google and Facebook for the entire industry?
So they don't really reveal the numbers by category. But we know because we work with customers that a lot of these customers also spend a lot of money on Google and Facebook directly, especially the large ones. We don't know how much. But for their top 50, 100 clients, it's fairly substantial. But -- and that's mostly on new home marketing.
Okay. So that will be more than what they spend on portals?
For the top 30, 40, 50 customers, that may be the case.
The next question is from the line of Gaurav Rateria from Morgan Stanley.
Hitesh, first question on iimjobs. The -- you see overlap in client base or these are different set of clients and help you to expand the base of the clients?
Yes. For Naukri, we have -- we sort of work with 75,000, 80,000 customers of all shape and sizes all over the country. We have a sales team of about [ 700 ] people, and we've been working with these customers for years. At least, where we're trying to serve these customers of -- 25%, 30% of these customers are fairly large customers. In the case of iimjobs, there was just maybe -- they have maybe 400 base customers right now. There's an overlap with the Naukri customer base. But there are some customers, a very few, of course, that are unique clientele as well. So the opportunity we see is, of course, on many fronts. One is, of course, we can grow the brand even further and get more job seekers under the umbrella of iimjobs, more -- expand to more categories. And then, of course, on the sales side, we can hopefully take iimjobs to more customers, potentially with so many more customers than they do right now and over the next few years as well. So we think it's a great sort of -- it really complements our sort of offerings and our value proposition to our customers. And if this works well, they can become a substantial sort of part of our portfolio over the next few years.
Second question, the billing growth slowdown, which happened in the 99acres. Could you give us a color? Is it across all regions? Or is it specific to few regions? And also, a color, a cut across broker and builder segment?
But we don't give out so many details. But yes, it is significant what happened in the first half of the year was that in FY '17, '18, thanks to the data rollout, a lot of new homes, sort of billings were impacted. In many markets, new home advertising slowed down considerably, right? So the base was low. And in FY '18, '19, that came back. So we were able to grow substantially on that base. But if you look at absolute numbers, FY -- Q4 was fairly substantial. We billed INR 67 crores in Q4, which is -- which gives you an IRR of maybe INR 272 crores or so. So -- but it's just that Q4 because there are sort of impacts started going away. And Q2 -- Q4 was a regular quarter last year. So the base of Q4 was -- for this year was high. So new home growth sort of slowed down a little bit in Q4. Now what will happen going forward is hard for me to say. Just maybe with the new trend, going forward, we may grow at only 15%, 20%. On the other hand, if things look up once again, then we can grow faster.
But there's nothing to call out with respect to different segments or regions within that.
Not -- we see some smaller markets were impacted because of a delay with our rollout in these markets. There were -- so that's some of the smaller geographies, including markets like Calcutta and a few other sort of states. But they are not a large part of our business. So it's not as if we were severely impacted by delays. There are rollout in some of the smaller markets. But yes. So right now, there's nothing sort of we want to call out.
Sir, last question from me. The ad spend increased by roughly INR 60 crores in fiscal '19. And you said that you'll accelerate the pace of investment in fiscal '20. Should we read that the incremental ad spend in fiscal '20 should be even higher than fiscal 19? Is that the way to read it?
Yes. Yes. It'll most probably be higher than -- and it will be higher maybe in all the businesses. But the way we sort of go about this is we sort of review things every quarter. So it's not as if we are working on a budget for the year. We sort of make our investments, see that it -- impact to those investments. If they work for us, then we sort of up their investment. If they don't, we go back to the drawing board and sort of plan once again. But yes, in general, we expect marketing spend to sort of go up this year as well.
And I was referring to the incremental spend. So INR 60 crore was the incremental spend. That INR 60 crore number should be even higher this year.
Yes.
The next question is from the line of [ Abhishek Joshi ] from CGS-CIMB.
My question is regarding Zomato and especially the food aggregator industry. So is the -- in what kind of phase the food aggregator industry is in? Is it like very competitive right now? Or we are seeing consolidation between 2 or 3 major players like Swiggy, UberEATS and Zomato? And like why are we so -- especially Zomato has been so aggressive in its marketing in last few months. Is it because we are losing market share or something?
No. Actually, as a consequence of its push, Zomato is possibly either maintaining or increasing market share. I -- there is no announcement to be made on consolidation at the moment. There are no approximately one that we know of. There was some media reports that Swiggy and UberEATS are consolidating, but then there was some -- following media reports that this [ is off ]. But we don't have any inside information about that. So as of now, it looks like the 3 companies will stay independent and will continue pursue their strategies. Zomato strategy is to push for growth.
No. Sorry. My question was that like is there immense competition you are facing in this industry? Or is the market spend going to go on decreasing because of the satisfaction of the present 3 players of their market share right now?
So I think there is competition. All players are well funded. The market has grown really fast. So companies grow really fast. But I don't see in the immediate term a reduction of expenditure of the companies that are in the space.
The next question is from the line of Prince Poddar from JM Financial.
Just some questions from my side. I see 99acres may -- we have seen this trend of Internet or digital penetration increasing significantly in the last 5 years. My question is pertaining to the fact that as opposed to the portals or as opposed to the -- as opposed to Google and Facebook, can we anecdotally have any sense from builders or their sort of developers that they might have a better ROI from portals like 99acres and Magicbricks? Or does it -- is it too early to worry about it?
So if you -- builders have been using Google, Facebook for a long time. It's not as if they've just started using Google and Facebook. And I -- my -- I sense that they're using Google and Facebook because they work well for sort of developers. See, the truth is that -- when developers advertise their property on -- properties today on portals like 99acres and Naukri, they're not -- 99acres and Magicbricks, it's not as if they are able to sort of create enough leads to sell all their sort of properties quickly. And so they spend that [ net-wise ]. And Google and Facebook also have a lot of traffic. So they probably sort of work for them, for some of the developers, at least, in some markets. So it's not as if it's an either/or situation right now for them. It is just that property is hard to sell. Today, there aren't enough buyers in the market. And therefore, they are sort of trying to sort of sell whatever they can. Our, of course, effort is to continue improve the user experience in our platform for buyers and sellers both so that we are -- we're getting more traffic going forward so that we can generate more leads to our -- for our customers from our platform itself.
A follow-on on that, Hitesh. Just -- so what do you think has been the role of channel partners in this regard in the past 3, 4 years? And probably going forward, how do you think about -- how those players can change the game for the industry?
I think we love channel partners because of -- key channel partners unlike -- we work with 5,000 developers and about 20,000 brokers. Channel partners are a large part of our business. In markets like Delhi NCR, for example, builders don't often sell direct. They sell only through general partners, right? So while in some other markets, the -- in the markets like Bangalore, our builders go direct as well. The thing about with these channel partners is that they are sort of in the business for the long run, and they sell multiple projects. So when you go to 1 partner, you'll get a lot of -- you can get a lot -- you start with them well, you can get a lot of business from them over time. And often what happens is that because they're selling multiple projects, the least they get, they're able to convert them better. So the ROI for them is actually -- it's pretty solid. So every market is different, and every builder thinks a little differently. The very large builders, maybe it does make sense for them to sell direct and to sort of also sell through general partners. But the small- and medium-sized builders often go only through general partners. So a large part of business -- our business comes from channel partners. And that's good.
Okay. And just one last thing, Hitesh. I think Naukri have heard that channel partners are able to charge higher to builders probably for bringing them, that they take all the stress on themselves. Is it a case that we, as a portal, are also able to probably charge them higher or better relation from channel partners as opposed to builders and directors directly? Or is it not the case anymore?
I do not understand the question. Can you repeat it, sorry?
Basically, anecdotally, I've heard that channel partners are able to charge builders and -- that was higher than probably what these guys pay to other portals or other means of converting leads. So when we, as 99acres, what we charge to channel partners, is it higher than probably other of our clients? Or...
No. Channel partners charge brokers -- builders more than what portals charge builders because it provides services. They provide an end-to-end service. So they are actually in the broking business. So they're not only source leads for them. They also convert those leads, organize site visits, negotiate, do the paperwork and so on and so forth. So they charge that service, and it's a transaction model. And that's why builders pay them more because they're paying not just for the lead, but also for closure. So we won't charge -- you can see, we are on a model where we are sort of selling space on our site, we're selling listings on our platform, we're selling leads and so on. So irrespective of whoever sort of buys those leads from us, we charge the same.
[Operator Instructions] The next question is from the line of Ravi Menon from Elara Capital.
So your advertising spend has pretty much doubled over the last -- from FY '17 to FY '19. So just wondering, should we think about the same sort of quantum of increase in absolute terms, I would say, at least, the next year? So should we see FY '18 to FY '19 kind of increase again or FY '20?
We expect our FY '20 spends to be higher than our FY '19 spends in all our verticals. But like I said earlier on the call, it's not as if we have a budget in mind. It's not as if we have a goal that's what we have to spend on marketing this year. For me, it's sort of review performance quarter-on-quarter. And if anything, our marketing spend in a quarter, we look at the kind of impact we got from that spend, and then we fine-tune our plans going forward. But yes, again, the sort of feeling right now is that our marketing spending this year will be higher than the previous year.
Great. And this whole advertising, promotional expenses, if we were to think about it across your various divisions, approximate breakup, would it be possible to provide that?
No. We don't sort of give out these numbers to our segments.
Okay. And just one more thing on 99acres. You're talking about sort of regional trends in the pickup that you've seen over this year, that will be helpful.
Sorry, could you just repeat that?
The pickup that we've seen in 99acres over this year, any regional trends to that?
Regional trends. Okay. So we've been -- we thought we have good growth everywhere. Like I was saying on the call, there's some smaller markets were impacted with a sort of delayed rollouts. So they are a small part of our business. But otherwise, we saw reasonably good growth almost in every region.
Great. And lastly, you're saying that it'd be probably tough to hold on to the margins on that, you say, 20%-plus kind of growth. But given where your recruitment business seems to heading into, and you've seen 99 Acres also grow pretty well. If that sustains, do you think that you can hold on to the margins, or possibly even improve this?
Well, a lot will depend on, like I was saying earlier, competitive activity, and a lot will depend on whether we are happy with the investment we are making. So if we sort of start getting good results, or if we see an opportunity to sort of do more because that is going to help the business in the long run, we will not shy away from making those investments.
Okay. And this would be primarily more, like you said, people and product innovation? Or would this be more advertising and promotions?
Both. Both.
[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to Mr. Hitesh Oberoi for closing comments.
Well, thank you, everyone, for taking time out for this call and have a great evening.
Thank you very much, sir. Ladies and gentlemen, on behalf of Info Edge India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.