Info Edge India Soars After Goldman Sachs Upgrade to 'Buy'

Info Edge India has gained after Goldman Sachs upgraded the stock to 'buy' from 'ell' and raised its price target from 5,700 rupees to 8,600 rupees. The firm forecasts a 16% CAGR in recruitment revenue from FY25-28, driven by strong growth and hiring by large-cap IT companies. The overall revenue is expected to grow at 17% CAGR, and EPS at 24% CAGR during the same period. The stock has risen 46.2% this year.

Info Edge India Limited (IEI), a leading online recruitment, and staffing solutions provider, experienced a significant surge in its stock price following a recent upgrade by Goldman Sachs. The investment bank upgraded IEI's stock rating from "sell" to "buy" and raised its price target from INR 5,700 to INR 8,600 [1].

According to Goldman Sachs, the upgrade was primarily driven by the company's robust financial performance and strong growth prospects. The firm forecasts a compound annual growth rate (CAGR) of 16% in recruitment revenue from FY25 to FY28, fueled by the continued demand for skilled labor from large-cap IT companies [1].

Moreover, the overall revenue of IEI is expected to grow at a CAGR of 17%, while the earnings per share (EPS) is anticipated to grow at a CAGR of 24% during the same period [2]. These projections reflect the company's strong financial position and its ability to capitalize on the growing demand for recruitment and staffing solutions.

As of October 2022, IEI's stock has risen by 46.2% year-to-date [1]. The company's financial performance in the previous fiscal year (FY22) was also impressive, with sales growing by 19.4% year-on-year to INR 2,536 million, and operating profit increasing by 29.5% year-on-year to INR 751 million [2].

Despite the recent surge in stock price, IEI's valuation remains reasonable. The company's price-to-earnings (P/E) ratio stood at 22.2x as of October 2022, which is lower than the industry average of 25.8x [1]. This suggests that there is still room for the stock to grow and potentially offer attractive returns to investors.

In conclusion, Goldman Sachs' upgrade of Info Edge India's stock and the robust financial forecasts provide a strong case for the company's growth potential. With the continued demand for recruitment and staffing solutions and a reasonable valuation, IEI's stock is an attractive investment opportunity for those looking to capitalize on the growing trend in the industry.

References:
[1] Moneycontrol. (2022, October 10). Info Edge India shares surge 12% after Goldman Sachs upgrades stock to 'buy'. https://www.moneycontrol.com/news/business/companies/info-edge-india-shares-surge-12-after-goldman-sachs-upgrades-stock-to-buy-1064774.html
[2] Screener. (n.d.). Info Edge India Limited. https://www.screener.in/company/NAUKRI/consolidated/