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The stock of Info Edge, which owns portals such as naukri.com, 99acres.com, shiksha.com and jeevansathi.com, has been on a roll over the past one year as the company tries to benefit from a revival in the economy.
On Wednesday, the shares of the company were up more than 2 per cent as markets cheered the announcement of its additional investments in fast-growing online restaurant guide provider Zomato. Info Edge invested Rs 185 crore in the present funding round of Zomato. It has totally invested about Rs 370 crore and owns a little more than half the stake.
With the possibility of a turnaround in the economy, the job market and spends are expected to increase. This sentiment has rubbed off on the stock, as it soared over 130 per cent in the last one year, despite valuations being uncomfortably high in the case of Info Edge.
The stock trades at over 80 times trailing earnings, making it extremely expensive.
In the first half of FY15, Info Edge’s revenues grew 18.5 per cent over the same period last year to Rs 316.4 crore, while net profits rose 16.4 per cent to Rs 73 crore. While earnings growth is stronger when compared to many other segments, it may still be a case of valuations running well ahead of fundamentals.
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